Friday, April 21, 2017

The deal that will force the DOJ to review what little it has on 1MDB

"... the deal could significantly dilute the international legal challenges confronting Prime Minister Najib Razak’s administration over the fallout from the 1MDB saga." - Malaysia, Abu Dhabi to settle dispute over 1MDB debt, Straits Times 

Friday, 21 April: Unless I'm getting it totally wrong, the US Department of Justice would be compelled now to review its position on the 1MDB. Might even have to drop the case altogether ...


The Straits Times' exclusive:

KUALA LUMPUR - Malaysia and Abu Dhabi have reached a settlement on a dispute involving billions of dollars in debt obligations of scandal-scarred 1Malaysia Development Berhad (1MDB) that is at the centre of an international money-laundering probe. 
Senior financial executives familiar with ongoing negotiations told The Straits Times that state-owned investment funds from both countries were expected to sign a settlement agreement as early as Friday (April 21). 
A central piece of the proposed settlement calls for Malaysia to repay Abu Dhabi US$1.2 billion (S$1.7 billion) before the end of this year. The amount represents a loan and accumulated interest charges on a bailout financial package 1MDB received from Abu Dhabi’s International Petroleum Investment Company, or Ipic, in July 2015. 
The bulk of the payment on the outstanding loan amount will come from the sale of so-called “fund units” from Brazen Sky Ltd, a financial unit owned by 1MDB, to an undisclosed buyer, according to the financial executives. 
The settlement agreement also calls for both parties to enter into negotiations to resolve another dispute involving roughly US$3.5 billion in the form of cash advances and payments from 1MDB to IPIC that are now in dispute. Negotiations will commence early next year and must be concluded before December 2020, during which time both parties will stand down from pursuing any legal action, the executives said.
The cash advances were part of Malaysia’s obligations under a US$3.5 billion bond issue that Abu Dhabi helped Kuala Lumpur raise in 2012. Under the proposed settlement, the Malaysian government will honour all obligations to its international bondholders.  
Bankers and legal executives familiar with the situation believe the deal could significantly dilute the international legal challenges confronting Prime Minister Najib Razak’s administration over the fallout from the 1MDB saga.
Here is why. The disputed monies in the Malaysia-Abu Dhabi row are central to legal suits brought by the US Department of Justice over the alleged misappropriation of funds from 1MDB. The Department of Justice claims that the funds siphoned from 1MDB went to fund purchases of real estate and other assets by associates of PM Najib.  
The settlement agreement between Malaysia and Abu Dhabi would achieve what is known in legal parlance as “no predicate offence”, the financial executives said.   
A predicate offence is a crime that is a component of a more serious crime and it is frequently applied in the US to actions involving the provision of funds for money laundering and the financing of terrorism. 
Proponents of the settlement between Malaysia and Abu Dhabi argue that a successful completion of the deal would weaken the impact of any legal action taken by foreign governments over alleged money laundering at 1MDB because of the lack of evidence. 
Malaysia’s Second Finance Minister Datuk Johari Abdul Ghani and 1MDB’s group executive director, Arul Kandasamy, who are part of the high-powered team leading the negotiations to resolve the dispute, did not respond to requests for comment. 
“The main aim was to avoid a messy arbitration fight and this (deal) is a product of both parties working through back channels to reach a settlement,” one senior executive noted. 
The executive disclosed that that other key players in the negotiations included Datuk Amhari Efendi Nazaruddin, who is a senior advisor to Mr Najib, and senior officials from Abu Dhabi’s Executive Affairs Authority, a special government agency that provides strategic advice to the Gulf state’s rulers. 
First reported by The Straits Times in April last year, the dispute between the two countries centered on fund transfers of roughly US$3.54 billion that 1MDB said it made to units of IPIC as part of its obligations under a May 2012 bond agreement. But IPIC declared that it never received those monies, triggering a row over interest payments on the bond issue which had helped 1MDB raise funds for the acquisition of power-generation assets. 
IPIC declared 1MDB in default later after the Malaysian state investment fund refused to honour an interest instalment of US$50.3 million, a move that exposed the Malaysian government to billions more in claims.  
As the dispute moved into private arbitration, the 1MDB scandal grabbed global attention with the US Justice Department filing lawsuits in Los Angeles seeking to seize dozens of properties and luxury assets that it claimed were purchased with funds amounting to over US$3.5 billion. US officials said the funds were illegally siphoned from the Malaysian state fund. 
The Justice Department probe, which is ongoing, is moving in tandem with investigations in several other jurisdictions, including Singapore, Switzerland, and Hong Kong. 
Mr Najib and 1MDB have repeatedly denied any wrongdoing and have pledged to cooperate with any lawful investigations. 

Thursday, April 13, 2017

Minister with Special Functions

Damansara Heights, 12 April: Daim Zainuddin was the last person to occupy the Minister with Special Functions so you can understand if Hishammuddin Hussein's appointment to that portfolio is causing great excitement and equally great distress. Daim was a very influential individual and very, very close to then Prime Minister, Dr Mahathir Mohamad, and he was appointed to that position as a matter of survival. I was not surprised when a seasoned political journalist whispered to me this morning that Hisham's appointment had taken Zahid Hamidi's "people" by surprise. In other words, they were feeling confused, even threatened. But the Deputy Prime Minister himself was cool as cucumber and savvy as Ali to help douse any attempt to use the appointment as an excuse to create a rift between himself and the Prime Minister.

Spot on, Zahid says

Some quarters say the appointment has made Hisham the de facto No 3 in government and party, in view that the general election can happen anytime now. In reality, however, Hisham has just been given a lot more responsibilities to shoulder. And by virtue that he is Umno VP, a lot of people see him as the most senior person in Najib's Cabinet after Zahid.
In the history of Ministers with Special Functions, none (except Tun Razak, who was SFM when he was already DPM) had gone on to become DPM or PM. Between Razak and Daim, King Ghaz, Ku Din, Asri Muda and Michael Chen were made SFMs. They were appointed to that special portfolio to carry out special assignments, which differ from time to time depending on the political, economic and social climates. Go and ask Daim, he'd tell you there was no extra political mileage to be gained from this portfolio. If Najib had wanted to strengthen Hisham's position in the run-up to the GE and Umno elections, he would not have made his cousin Minister with Special Functions. DPM2 would have done the trick neatly.

Read also:
Najib redraws his inner circle by Joceline Tan

Wednesday, April 12, 2017

RUU355: And the biggest loser of all is ...

“(Allowing Hadi’s motion) was actually designed as a political scheme to distract Malaysians from the crimes that the prime minister has committed, mainly the fact that the prime minister has stolen billions of ringgit from 1MDB, a wholly owned subsidiary of the government of Malaysia. 
“[…] We will, on the part of DAP, reject the private member’s bill brought forward by Marang, but the bigger agenda, … that we should not lose sight of, is to bring down a kleptocratic administration led by the biggest thief of all in the country, Dato’ Sri Najib Razak.” - Tony Pua, Facebook, April 6 

A screenshot of Pua's April 6 clip

Puchong, 12 April: Anyone watching his April 6 video clip on FB in response to RUU355 could tell that YB Tony Pua, the DAP's publicity chief, was asking for it. 

True enough, PM demands apology, retraction from Tony Pua, FMT April 11]. Tony Pua confirmed receipt of the letter of demand yesterday:



What Pua did not mention in the Facebook posting is the fact that he himself had sent a "love letter" to the Prime Minister in January (read h e r e).  Najib Razak had filed for a defamation suit against Tony Pua earlier in March 2016 and the case is scheduled for hearing in September this year. So by Pua's own logic, it's not unrequited love. The DAP man really loves his Prime Minister, too. 

But his love aside, Tony Pua could well end up the biggest fool in the RUU355 episode as his partners in PKR did this number - PKR supports Hadi's right to table RUU355 (The Star, 11 April) - about the same time Najib's lawyers issued him the letter of demand.



 I'm not sure if Tony Pua saw that coming ...

Friday, April 07, 2017

Gentleman's agreements, like match-fixing, MUST be thrown out of sports bodies

A young man who likes to get things done, fast

Puchong, Fri 7/8/13: Like it or not, Tunku Ismail Sultan Ibrahim as the new president of the Football Association of Malaysia has gotten Malaysians quite excited about the future of the game. Maybe, just maybe, we shall taste glory once again. Like someone said, all the Johor prince needs to do is to translate his "great personality and strong leadership qualities" into action. 
Tunku Ismail's rise in FAM has gotten supporters of Norza Zakaria, the former Umno Supreme Council member, very excited but for a different reason. 
They see the changing of the guards at FAM as a good omen for Norza, who is eyeing to be the next Badminton Association of Malaysia president. 

Norza says there's a gentleman's agreement between him 
and the outgoing president, Rosmah and KJ ...
I am all for change if change is for the better, and I'm all for younger and fresh faces if they can bring about positive energy and image. But with all due respect to Norza and his supporters, Norza is no Tunku Ismail. 
And all that focus on the so-called "gentlemen's agreement", intended to give Norza free and automatic passage to become president, is doing him more harm than good. 
It's certainly not doing BAM's image any favours, either.
To an outsider who loves the game (badminton, not politics, I mean) and sports in general, this so-called gentleman's agreement sounds no different from match fixing! 
It should be strongly discouraged and disallowed. Not just from BAM but from all sports bodies and associations in this country! I totally agree with the views of Elyas Omar, the former BAM president. 
Take a cue from Tunku Ismail: if the Johor prince himself is willing to fight for the presidency of FAM, Norza should stop worrying about how a contest in BAM will cause a split.   
But if he insists that a contest would result in "people taking sides, bickering and ... disunity" in FAM, then the right thing to do, if I may suggest, is to gently step aside and let the other guy through.  


 Read also:


Former BAM chief scoffs at the idea of a "gentleman's agreement" to decide new president

Interview with AlAmin: Let the Council decide 





Interview with Norza: Man with a Vision


Thursday, April 06, 2017

Why MAIS shouldn't lodge another police report


Bangsar, Thurs: Just as I was about to extend my blog holiday due to minor health reasons, the highly-controversial A Voice had to come up with Dear Selangor Mufti ... What is the fatwa on MAIS default? (4/5/17). I could not sit idle even if I wanted to because, by default , this latest instalment on the subject by Another Brick in the Wall blog will affect my well-being.
Some of my readers would be aware that as a result of A Voice's March 6 posting, which I quoted in my While the Agong makes headllines (7/3/17), MAIS has demanded both A Voice and I to apologise publicly (as in newspapers in English and Bahasa) to HRH Sultan Selangor. MAIS has also lodged a police report against both of us (after we failed to meet their deadline for the apology). 
Court proceedings between MAIS and parties that are trying to get back the RM125 million they had lent it to build a hostel, which is now operational and bringing the Council a healthy income, are ongoing or pending so I shall not dwell too much into them. 
But instead of lodging another police report against A Voice (or, for that matter, against me for merely reporting it here), may I suggest MAIS try and reach out to blogosphere in a more professional manner and try to explain its position. I'm sure they can do that without discussing the merits of the case (or do it off the record).
For context, please read the blogger's related postings Istana request no apology, but Court judge MAIS wrong (21/3/17),  MAIS demanded apology (10/3/17) and Selangor royal default? 6/3/17).

Saturday, April 01, 2017

Two years later, nobody has migrated because of GST




Puchong, April 1: Two years ago today, Malaysia joined more than 160 countries with GST. The move was greeted by so much whining, griping and bitching by some quarters that I suggested that they seriously consider migrating to any of the 40 countries that were still GST-free [40 countries you can migrate to if you wish to avoid Malaysia's new tax - 1 April 2015]. 


As far as I know, nobody has done so.

In the meantime, the Government has collected some RM40 billion of GST during the first year alone, which is partly why our economic is doing relatively well, and also why the noise level against the GST has gone down a lot. The rate has remained 6%, one of the lowest in the world (go here for worldwide GST rates: only a handful of countries have lower GST than Malaysia's while most European countries have a GST of over 20%). The number of countries without GST is also shrinking very quickly, with Saudi Arabia and India set to join us. 

In conclusion, expect GST to be largely missing from the Opposition's manifesto for the coming General Election.