The black swans in Malaysian politics

By Liew Chin Tong

The Independent, Singapore

April 16, 2017

I would like to thank Mr Tan Chin Tiong, Director of Yusof Ishak – Institute of Southeast Asian Studies, for the invitation to speak at this excellent institution, of which I was a visiting research fellow in 2006.

I would also like to express my appreciation to my friends Dr. Lee Hock Guan for arranging this visit and Dr. Ooi Kee Beng for chairing the session.

I last spoke here almost nine years ago on 23rd April 2008, a month or so after the great Black Swan back then – the political tsunami on 8th March 2008.

Since then, there has never been a dull moment in Malaysian politics. We have experienced a Black Swan after a Black Swan.

For instance, just a year ago, who would have expected Dr. Mahathir Mohammad to become among Opposition leaders working hard to push UMNO to become the Opposition.

Just as I was giving the final touch for this speech yesterday, there was the news that Prime Minister Najib Razak had appointed his cousin who is also Defense Minister Hishamuddin Hussein to be the Minister with Special Functions in the Prime Minister’s Department.

This gives rise to a new Black Swan question: does this mean Najib will step down as Prime Minister before the next general election?

Should that happen, we will have to grapple with a new set of conditions and scenarios. If he doesn’t, there is already a new power equation in which Deputy Prime Minister Zahid Hamidi is being sidelined, but Zahid may not take it lying down.

To put things in context, let me bring you to late November 2007.

As someone born and bred in Kuala Lumpur, I was offered, and reluctantly accepted a challenge to contest a parliamentary seat in the unfamiliar ground of Penang.

The two seats available to me to choose from, namely Bukit Bendera and Jelutong, were both Barisan Nasional incumbent seats, which DAP stalwarts Lim Kit Siang and the late Karpal Singh lost in the 1999 general election.

No one expected me to win. Even fewer thought the change of government in Penang was possible. At best, some observers noted that there was a possibility of denying Barisan Nasional’s two thirds majority in Penang.

Only during the campaign period that we noticed some signs pointing to the possibility of winning Penang.

What we didn’t expect was that the Opposition parties had enough numbers to form state government in Selangor, Kedah and Perak late in the night of 8th March 2008.

I was probably one of the very few who somehow had some inklings of what were to come. Apart from the surveys and polls I came across, I recalled a conversation at a private lunch meeting involving 10 core leaders of Penang DAP on 10th February 2008, three days before the dissolution of Parliament.

Lim Kit Siang asked us “to prepare for the unthinkable”; partly due to the fact that he noticed ethnic Indian voters were in such restless and discontented state – a situation that had never happened before.

Fast forward to 2017. While many pundits would like to think that Prime Minister Najib Razak is in a strong and unassailable position, they may have chosen to ignore the fact that there has never been such restlessness and discontents among Malay voters recently. Herein lies the contradictions and the possibility of Black Swan events.

Let me be clear here. I am not suggesting that a change of government will be a walk in the park. Far from it. However, the stake is very high for Najib and UMNO, and they will do whatever it takes to keep UMNO in power. That will mean some very intense months ahead until the next general election.

My point is that Najib and UMNO are vulnerable, and therefore susceptible to Black Swan events.

The largest Malay swing in favour of the Opposition thus far happened in the 1999 general election as a result of Anwar Ibrahim’s sacking by Dr. Mahathir Mohamad in September 1998, which sparked the reformasi movement. An irony indeed.

As a comparison, the 1999 wave was mostly urban, when the rural sector was still fairly large; and UMNO machinery was largely intact, albeit losing some UMNO Youth leaders to Anwar’s side.

Then, the civil service was in support of UMNO. Even then, UMNO suffered significant loses and was largely saved by overwhelming support of non-Malay voters.

In both the 2008 and 2013 general elections, Malays who voted for the Opposition were mostly urban voters. But today, discontents among Malays can be felt among UMNO’s vote banks such as civil servants, Malay women, and even FELDA settlers.

The Quiet Front

How to describe the mood among Malay voters today?

I recalled during the 2008 campaign, the Sun newspaper front-paged an interview with my opponent Mr. Chia Kwang Chye, who was then the powerful Secretary-General of Gerakan, a Federal Deputy Minister, and the incumbent for three terms.

“The Quiet Front” was the headline in which Chia told the newspaper he sensed troubles, as voters and traders he met a particular local market were very quiet and passive.

I went to the same market with Lim Guan Eng around the same time with a hugely different reception: the traders carried Guan Eng on their shoulders as if he had won the election, and the entire market welcomed us with overwhelming enthusiasm.

I also remember reading about the 1996 Australian election when, it was said, voters “were waiting for Paul Keating with their baseball bats”, just to finish him off politically.

Such is the mood I detect today. Many Malays whom I came across told me that they and their friends were just waiting for the election to teach Najib a lesson, “kita tunggu sahaja pilihanraya datang”.

My view is that the sentiment against Najib in the Malay ground is beyond repair. What you see in the mainstream media, be it a newspaper or TV news, does not tell the whole story on the ground.

The challenge for UMNO is how to deal with Najib, and whether the antipathy is just against Najib the person or UMNO the party. Recent allegations of corruption in “guardian” institutions for the Malays, such as FELDA and MARA, will certainly aggravate the situation.

Take my constituency as an example. I commissioned Merdeka Centre, an independent polling firm, for polls survey in February 2013, a month before the last General Election, when I was deciding whether to contest in Kluang, and once again in August 2016.

In February 2013, the satisfaction of Malay voters in Kluang with the Federal Government was at 72%; and satisfaction of the same group with the performance of Prime Minister Najib was at 78%.

In August 2016, only 39% of Malay voters in Kluang were satisfied with the Federal Government while those who were not satisfied were at 56%. And only 42% of the same group was satisfied with Najib as Prime Minister while 50% was not.

The situation in Kluang is widespread in other similar constituencies in Johor, and elsewhere, among Malay voters. An important point to note, this was before Mahathir’s Parti Pribumi Bersatu Malaysia was officially formed in September 2016.

How did we get here?

The question is, how did we get here?

Najib and Barisan Nasional received only 47% of votes in the 2013 general election, but continued to rule thanks to the process of gerrymandering of constituencies, heavy use of money, and abuse of government machineries for campaign purposes, and by “planting” multi-cornered battles in Sabah and Sarawak to split votes.

Despite such abuse of power and blatant disregard for the law, of the 133 parliamentary seats Barisan Nasional won in the 13th general election, 60 were garnered with a vote share of between 40.6% (in Mas Gading in Sarawak) and 55.8% (in Johor Bahru).

A further 33 seats were won with a vote share of between 56% (Batu Sapi in Sabah) and 60.9% (Parit Sulong in Johor).

I admit that not all Opposition seats are safe. Thirty-eight opposition seats were won with a vote share of between 47.4% (Alor Setar in Kedah) and 55.8% (Pasir Mas in Kelantan), of which 5 were with less than 50% votes. A further 18 seats were won with a vote share of between 56% and 60%.

However, if there is a net swing of 10%, it means that BN would lose 93 of its 133 seats. This is not impossible in a “gelombang” or a wave of voters’ swing, a scenario such as the one we witnessed in the 2008 general election.

Of course, based on the last election results, 56 of Opposition’s 89 seats could also be lost, if there is a net swing of 10% to go the other way.

As I mentioned earlier, many pundits and some politicians have argued that Najib would still win, because they think the rural voters will still be with him. It’s not really true. Let me explain this.

There are actually very few rural seats left in the Peninsula, if we go by the idea of rural areas as we usually imagine – that is a far-flung place, cut off from communications with the wider world.

Sorry to disappoint you, but those are the images you are likely see in some nostalgic-style TV advertisements during Hari Raya, Chinese New Year or Deepavali celebrations.

The reality is this: UMNO won 88 seats in the 2013 general election, of which 14 were from Sabah, and one from Labuan, which a Federal Territory seat. Of the 73 seats on the Peninsula, 30 or so are seats which are “built and designed” for UMNO. The remaining 40 seats are up for grab.

Most of UMNO/BN marginal seats are in the following clusters:

• Southern Kedah/Northern Perak/Mainland Penang;

• Southern Perak/Northern Selangor

• The Karak Highway Belt

• Melaka/Northern Johor

• Southern Johor

What are these seats, then? Most of these seats are semi-urban areas which have a town and surrounded by some villages with less than half an hour’s drive to the towns.

In these semi-urban constituencies, most of the youth and adults are working outstation, residing in larger cities in the Klang Valley, and Singapore.

Often these are seats with Malay majority voters but with a sizable number of non-Malays.

In fact, according to the Statistics Department, 65% percent Malays live in urban areas, while slightly more than 70% of the national population live in urban areas.

The semi-urban areas in West Coast Peninsula are likely to determine the outcome of the election. They are far from “rural” as most observers and politicians would like to think of them.

Also, the current Malay discontents are even enveloping FELDA areas which are deemed fixed deposits and rural, a stronghold for UMNO.

In short, much as the Opposition is vulnerable, Najib is walking on thin ice, too.

What are Najib’s strategies to survive?

It is not that Najib doesn’t understand the precarious position he is in. I supposed he has resigned to the fact that UMNO would not be able to win an outright mandate in the coming election.

Hence, he had been trying to break up the Opposition, as soon as the 2013 general election concluded.

There were even attempts by Indonesian Vice President Yusof Kala to broker deals between Najib and Anwar Ibrahim, between June and August 2013 which Anwar rejected.

And, since then, Najib’s strategies included:

• Putting Anwar Ibrahim behind bars, hence depriving the Opposition its Prime Ministerial candidate and unifying figure;

• Luring PAS into forming a de facto alliance with UMNO on the pretext of promoting hudud legislations; and

• Portraying the Opposition as a DAP/Chinese dominated alliance.

However, in his grand scheme to win by default, Najib did not anticipate that:

• The Opposition survives despite Anwar’s imprisonment;

• A sizable number of PAS leaders had formed Parti Amanah Negara in September 2015 to continue the struggle, and many in PAS still disagree with their top leaders’ collusion with UMNO; and

• UMNO would split in 2016, and Parti Pribumi Bersatu Malaysia would be formed to join Pakatan Harapan.

Broadly, even without Najib at helm, UMNO is weaker than in the 2013 election for the following reasons:

First, since independence till the 2004 general election, UMNO ruled through an extended coalition of Alliance/Barisan Nasional, and governed with a substantial support from the non-Malays.

But the comfort of buffers formed by BN component parties in Peninsula eclipsed since UMNO made a right turn – becoming more visible in its claim of Malay supremacy – in July 2005 with Hishamuddin waving the kris at UMNO General Assembly.

This caused massive defeats of MCA, MIC and Gerakan in both the 2008 and 2013 general elections. UMNO dug further in since 2008 to push the racial line in the hope to expand Malay support but achieved very little.

Second, as UMNO is incapable of expanding its support base since 2013, collaborating with PAS becomes an attractive option.

UMNO hopes that by colluding with PAS to divide the society into a battle between Muslims and non-Muslims, the UMNO-PAS de facto alliance would win enough seats between them to form the next government.

However, as an unintended consequence, such a move further alienates non-Malay voters in the Peninsula, as well as majority of voters in Sabah and Sarawak.

Third, while Najib the man managed to command more support among Malay voters compared to UMNO the party in the 2013 election, the situation has changed.

Najib is now a burden to UMNO due to the 1MDB mega scandal, and unpopular economic policies such as GST, fuel hike and cuts to basic amenities like health and education.

Angry UMNO leaders and members have formed Bersatu and this new Malay party is making inroads to areas previously inaccessible to the Opposition.

In short, UMNO under Najib is on a narrowing path with a much smaller base than ever. If Najib is still perceived as strong, it is because the Opposition is seen as weak and disunited. Najib is not strong on his own merits but only survives in a vacuum.

What’s ahead?

The known knowns are that Najib is not popular, and there are serious discontents among the Malays.

But there are certainly challenges for the Opposition to overcome in order to precipitate change.

First, while there are serious discontents among the Malays, the Opposition must stand for something inspiring and visionary, and not depends solely on the anger against Najib as forward strategy.

The Opposition must stand for more than just removing Najib. The economy and the well-being of the people should be the number one priority.

Second, the coming together of Bersatu and the Pakatan Harapan parties, namely Parti KeADILan Rakyat, Parti Amanah Negara, and Democratic Action Party, is a reconciliation of unlikely former foes.

Who would imagine Dr. Mahathir and Anwar Ibrahim forming an alliance nearly 20 years after their very bitter fallout in 1998.

But the coming together of the once political father-and-son can unleash huge energy if handled properly.

After all, both Mahathir and Anwar are positive leadership figures compared to Najib, and they each appeal to some segments of the Malay electorate.

Third, to present a common agenda for Mahathir’s audience and DAP’s supporters is another challenge.

If Mahathir and Bersatu go on a racial campaign, it will depress the support of non-Malay voters, which in turn creates a lose-lose situation for the entire Pakatan Harapan coalition.

Likewise, the regime’s attack on Mahathir and Bersatu is that they are associated with the DAP.

The presence of DAP can also depress the support for Bersatu and other Malay-based parties like PKR and Amanah if the Opposition is unable to break out of UMNO’s racial playbook, and articulate new narratives that can bridge all groups in a larger vision.

Fourth, PAS as UMNO’s “new friend”, as Zahid Hamidi calls them, is a reality, and the sooner a clear line is drawn between the genuine/official Opposition, Pakatan Harapan, and the pseudo “third force” of PAS, the better it is to condition the voters to vote along the line of those “for Najib”, and those “against Najib”.

Fifth, the ultimate challenge for the newly re-aligned Pakatan Harapan that included Bersatu, is that Najib could just exit the scene and take out the raison d’être of the Opposition and the anger in the community.

If this is to happen, can the Opposition survive this unlikely but not impossible Black Swan?

                This entry was posted on Sunday, 16 April 2017, 6:00 pm and is filed under
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This first generation immigrant just got into all eight Ivies

by Harry Shukman

The Tab

31.3.2017

Read the essay about learning English that won her a place at every single Ivy

Yesterday Cassandra Hsiao heard the news that she made it into not just one but all eight schools of the Ivy League. With offers to study at Harvard, Princeton, Yale, Dartmouth, Brown, Columbia, Cornell and Penn, she now has to choose which world class institution she’ll join in the Class of 2021. A writer, journalist, and one-time rapper (in front of Lin-Manuel Miranda), Cassandra explained how she nailed her applications – and shared her common app essay that helped get her there.

How does it feel to get into every single school in the Ivy League?

I’m still processing it. It’s not something you expect when you open these college messages on your portal. I saw a yes and a yes, a congratulations after a congratulations. It’s totally surreal. It’s still sinking in. I had a moment to myself yesterday where I was just sobbing. I celebrated with my parents. This is quite the honor, to have these fantastic institutions accept me. It’s really something.

Your parents must be super proud.

Oh yeah! They’re over the moon. They’re a huge part of why I was able to accomplish this really. You can’t do it without the support of your parents. They believed in me and encouraged me to follow my passions along with my teachers, my friends, mentors, life mentors, industry mentors – these are the people who I really owe a lot to. God opened a lot of doors for me and put these people in my life who were able to see something in me and nourish me. There’s no way I would have been able to do this without them. This thing is really a group effort. So thanks to all the people in that group.

What did you focus on in your common app essay?

My parents are immigrants – my mom was born in Malaysia, my dad was born in Taiwan. When I was about five we moved here. English is not their strength and it was interesting to me growing up in a house of immigrants, how we interact with language. Words that don’t translate will seep into our own – the way I talk at home is very different from the way I talk outside of home. Sometimes when I was growing up people laughed at me for things I said that sounded completely normal to me but were not to them. So I wrote about that experience.

Read Cassandra’s essay in full

In our house, English is not English. Not in the phonetic sense, like short a is for apple, but rather in the pronunciation – in our house, snake is snack. Words do not roll off our tongues correctly – yet I, who was pulled out of class to meet with language specialists, and my mother from Malaysia, who pronounces film as flim, understand each other perfectly.

In our house, there is no difference between cast and cash, which was why at a church retreat, people made fun of me for “cashing out demons.” I did not realize the glaring difference between the two Englishes until my teacher corrected my pronunciations of hammock, ladle, and siphon. Classmates laughed because I pronounce accept as except, success as sussess. I was in the Creative Writing conservatory, and yet words failed me when I needed them most.

Suddenly, understanding flower is flour wasn’t enough. I rejected the English that had never seemed broken before, a language that had raised me and taught me everything I knew. Everybody else’s parents spoke with accents smarting of Ph.D.s and university teaching positions. So why couldn’t mine?

My mother spread her sunbaked hands and said, “This is where I came from,” spinning a tale with the English she had taught herself.

When my mother moved from her village to a town in Malaysia, she had to learn a brand new language in middle school: English. In a time when humiliation was encouraged, my mother was defenseless against the cruel words spewing from the teacher, who criticized her paper in front of the class. When she began to cry, the class president stood up and said, “That’s enough.”

“Be like that class president,” my mother said with tears in her eyes. The class president took her under her wing and patiently mended my mother’s strands of language. “She stood up for the weak and used her words to fight back.”

We were both crying now. My mother asked me to teach her proper English so old white ladies at Target wouldn’t laugh at her pronunciation. It has not been easy. There is a measure of guilt when I sew her letters together. Long vowels, double consonants — I am still learning myself. Sometimes I let the brokenness slide to spare her pride but perhaps I have hurt her more to spare mine.

As my mother’s vocabulary began to grow, I mended my own English. Through performing poetry in front of 3000 at my school’s Season Finale event, interviewing people from all walks of life, and writing stories for the stage, I stand against ignorance and become a voice for the homeless, the refugees, the ignored. With my words I fight against jeers pelted at an old Asian street performer on a New York subway. My mother’s eyes are reflected in underprivileged ESL children who have so many stories to tell but do not know how. I fill them with words as they take needle and thread to make a tapestry.

In our house, there is beauty in the way we speak to each other. In our house, language is not broken but rather bursting with emotion. We have built a house out of words. There are friendly snakes in the cupboard and snacks in the tank. It is a crooked house. It is a little messy. But this is where we have made our home.

                This entry was posted on Sunday, 16 April 2017, 5:39 pm and is filed under
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Two ways to remember and honour Karpal  – elect DAP-led government for third term in Penang as well as elect Pakatan Harapan to form Federal Government in Putrajaya to Save Malaysia from global kleptocracy, a failed and rogue state

We are here to remember and honour Sdr. Karpal Singh – a giant of a Malaysian who had dedicated his life to a more united,  just, equal and democratic Malaysia.

There are two ways to remember and honour Karpal, who left us three years ago with many unfinished national business.

The first is to elect a DAP-led government for the third term in Penang and the second is to elect Pakatan Harapan to form the Federal Government in Putrajaya to Save Malaysia from global kleptocracy and from heading towards a failed and a rogue state.

This year Malaysians will be celebrating our 60th National Day to commemorate the nation’s attainment of Independence on August 31, 1957.

I was in Form III in Batu Pahat High School in 1957, I can still remember that on August 31, 1957,  we gathered at the school compound where every student was given a bunting of the new national flag and a scroll setting out  the Proclamation of Merdeka which was declared by the first Prime Minister, Tunku Abdul Rahman at the Merdeka Stadium in Kuala Lumpur.

We were brimming with hope and confidence of a new future as a new nation.

In the past six decades, Malaysia failed to live up to the promises of Merdeka in 1957 for the country to be an example and showcase to the troubled world as to how diverse races, languages, religions, cultures and civilisations could successfully co-exist and integrate to build a united, harmonious, purposive, democratic, just, progressive and prosperous nation.

South Korea  recently provides us with  a painful reminder of our  nation-building failures.

Sixty years ago, South Korea was very poor and backward, with a  per capita GNP which is only one-third in this country. Today, South Korea is one of the richest, most developed and prosperous nations in the world.

Sixty years ago, any notion of democracy and human rights in South Korea was non-existent as it was ruled by a dictatorship. But today, the South Korean Parliament could impeach the South Korean President and eight judges of the South Korean Constitutional Court could unanimously uphold the impeachment of the South Korean President by the South Korean Parliament on charges of corruption and cronyism.

Can Malaysians to do the same thing against “MO1” which had earned for the country the international infamy and ignominy of a “global kleptocracy”?

Why is Malaysia so backward and behind South Korea in political and economic developments today, when we were ahead of South Korea on both scores sixty years ago.

What are Malaysians hesitant when overseas to admit they are Malaysians for they know that the questions that will follow will be about “MO1”, the 1MDB scandal and Malaysia as a global kleptocracy?

The 60th National Day anniversary is a fit and proper moment for the nation to undertake a “Malaysia Reset” movement, where we keep policies and measures which had done good to the country but correct or even abandon policies and measures detrimental to the nation or which had damaged the nation building process.

But the pre-condition for a “Malaysia Reset” of nation building directions and policies is the achievement of two objectives in the forthcoming 14th General Elections, which could be held in the next 150 days, viz: the

•	The re-election of a DAP-led government for the third term in Penang; and

•	The election of a  Pakatan Harapan Federal Government in Putrajaya.

Let us pledge ourselves to these two objectives to  Save Malaysia from global kleptocracy and a failed and a rogue state, by ensuring that Malaysia shall forever remain a democratic nation where there is an incorruptible government and the rule of law.

(Speech at the Third Anniversary Karpal Singh Commemoration Walk at Island Glades, Penang on Sunday, 16th April  2017 at 9 am)

                This entry was posted on Sunday, 16 April 2017, 11:08 am and is filed under
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New Straits Times admitting that it has transformed itself  from a “newspaper” into a “lies-paper”

It must be a new phenomenon in the world of Malaysian journalism – New Straits Times admitting that it has transformed itself from a “news-paper” into a “lies-paper”, without any compunction or sense of journalistic responsibility by claiming that it was only reporting on the  “lies” by others in its pages and columns.

It is significant that the  New Straits Times response to my speech at the Johor DAP State Leaders Retreat at Kukup, Johor  on Saturday about UMNO/BN mainstream media unabashedly transforming themselves from newspapers to “lies-papers” made no attempt to deny that they were publishing “lies” instead of news, except to claim that  they were publishing the “lies” spread by others.

Will the New Straits Times similarly oblige DAP and Pakatan Harapan leaders and print whatever “lies” concocted by them  about the Prime Minister, Datuk Seri Najib Razak, UMNO and Barisan Nasional in the NST pages and columns?

Of course not and this will be the correct decision for journalists must be guided by the canons of journalism, the most fundamental of which is that a newspaper should not degenerate into a “lies-paper”!

I had warned that the 14th General elections is going to be dirtiest in the nation’s history – dirtier than the 13th GE –  as UMNO/BN owned or controlled mainstream media have already transformed themselves from newspapers into “lies-papers” against DAP and Pakatan Harapan leaders.

In the past four months, UMNO/BN mainstream media like Utusan Malaysia, New Straits Times, Berita Harian and Star have become  “lies-papers” as part of the UMNO/BN campaign to demonise Pakatan Harapan leaders and myself, where I am described as a devil, puaka, even jembalang; that I am anti-Malay, anti-Islam; cause of May 13, 1969 riots; a communist; a stooge of foreign powers; that I dominate Pakatan Harapan and made other leaders like Tun Mahathir, Datuk Seri Anwar Ibrahim, Datuk Seri Wan Azizah, Tan Sri Muhyiddin Yassin, Datuk Seri Azmin Ali and Mohamad Sabu as my stooges and puppets – all sorts of possible  evil under the Malaysian sun!

What has New Straits Times got to say about my analysis that the recent epidemic of lies, fake news and false stories about me is  not because I have suddenly become No. 1 national security risk, or the greatest threat to UMNO/BN government, but simply because UMNO leaders and propagandists are in a panic mood as they have realised that there is a possibility that they have lost the support of the majority of Malay voters in the country.

This is the reason why UMNO/BN leaders, propagandists and cybertroopers have  resorted to the primordial politics of lies, hate and fear to make me into a monster or ogre by creating   hatred and fear among the Malay voters with the “scare story” that if UMNO is defeated in the next general election, the Malays will lose their political power and their rights to the Chinese and the DAP, hoping that  the Malay electorate will not see through the UMNO bluff and political chicanery because of the following fallacies and falsehoods:

•	DAP is not the “Big Bad Wolf” which will deprive the Malays of political power and their rights if UMNO is defeated in the 14th General Election, as Malay political power will not be in jeopardy because of the reality of demography in Malaysia, and the new Harapan Pakatan Prime Minister will be a Malay and not a non-Malay.

•	Furthermore, far from undermining or depriving Malays of their rights in the country, a Pakatan Harapan coalition comprising DAP, PKR, AMANAH and Pribumi Bersatu, will demonstrate that it can deliver results to do better than the UMNO/BN government to protect and promote the rights and interests of Malays and of  all communities in the country as Pakatan Harapan want to win, not just the 14th GE, but the 15th, 16th and future GEs as well.

•	But the greatest lie and most irresponsible politics of fear and hate is to spread the falsehood that the DAP is a Chinese party which is anti-Malay and anti-Islam, when DAP had been a Malaysian party right from the beginning of our formation 51 years ago, comprising Malaysians regardless of race or religion, and fighting for the rights and interests of all Malaysians, again regardless of race or religion.  This was why in 1998,  a DAP leader, Lim Guan Eng (now DAP Secretary-General and Penang Chief Minister)  had gone to jail and deprived of his position as Member of Parliament when he defended the honour and dignity of an under-aged Malay girl.

For 51 years, DAP and I had been  an open book, which is why UMNO leaders and propagandists could not find a single evidence that DAP and I had been anti-Malay and anti-Islam –  the reason for the ludicrous RM10,000 (upped to RM50,000 within 24 hours) prize for the  best essay or social media posting that I am anti-Malay and anti-Islam!

As  the Prime Minister, Datuk Seri Najib Razak has recently  been deploring the politics of lies, fake news and false information, will New Straits Times set the example by stop being a “lies-paper” and return to its journalistic and time-honoured role as a “newspaper”?

                This entry was posted on Monday, 17 April 2017, 12:33 pm and is filed under
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Malaysian PM Najib Razak accuses media of ‘fake news’, doubts corruption reports

Lindsay Murdoch

The Sydney Morning Herald

APRIL 20 2017

Bangkok: For two years Malaysian Prime Minister Najib Razak has shrugged off revelations by foreign journalists that almost $1 billion turned up in his personal bank accounts amid one of the world’s biggest ever financial scandals.

Now Mr Najib, preparing to call early elections, has accused journalists of fabricating fake news about Malaysia.

“This tide of fake and false news threatens of turn the truth into a purely subjective matter, with little relation to the actual facts,” he told an Asian media awards event in Kuala Lumpur on Wednesday evening.

In a country where the mainstream media is tightly controlled by the government and small independent media outlets are under constant threat of closure and legal action, Mr Najib also claimed that free speech is “thriving”, pointing to what he called regular criticism of the government, ministers and officials in the local media.

But with freedom, he said, comes responsibility. He quoted the then Manchester Guardian’s long-time editor CP Scott who famously declared that “comment is free, but facts are sacred”.

“The government of Malaysia will be on your side,” Mr Najib told representatives of the World Association of Newspapers and News Publishers.

“All we ask in return is the opportunity to remind you to rely on your reporting and sourcing, in whichever country that may be: not on rumours, not on unsourced anonymous quotes, and not on invented propaganda, no matter how persuasively it may be presented – but on verified facts,” he said.

Investigations are underway in at least five countries into how billions of dollars went missing from Malaysia’s state investment fund 1Malaysia Development Berhad (1MDB), which Mr Najib set up in 2009 and supervised through his chairmanship of an advisory board.

The Sarawak Report, a small online site based in London and The Wall Street Journal, had traced a complex web of global banking transactions from 1MDB.

The Prime Minister claimed $US681 million ($907 million) that arrived in his personal accounts was a gift from a mysterious unnamed Saudi prince and that he returned $US620 million of it.

He denies any wrongdoing and has been cleared of any charges by his attorney-general.

But even if he did return the money, which critics ridicule, Mr Najib has failed to explain what happened to the remaining $US61 million.

Former prime minister Mahathir Mohamad, who has emerged as a fierce critic of Mr Najib, wrote in his blog this week that there must be bank records detailing movement of the money in today’s largely cashless world.

Dr Mahathir said banking secrecy should not get in the way of an investigation by government authorities into alleged criminal acts. He said unless it can be proved otherwise, the money in Mr Najib’s account must be deemed to be money stolen from 1MBD.

“The person stealing the money must be classified as a thief whether he is punished or not,” Dr Mahathir said.

In his speech to the publishers, Mr Najib railed against media outlets which had talked about Malaysia being in danger of becoming a failed state.

“Unfortunately when the government’s opponents spread fake news, some people believe them, because they believe – wrongly – that they would not lie,” Mr Najib said.

“This is not confined to Malaysian social media,” he said.

“A well-known foreign newspaper has taken to printing complete lies about the government,” he said in an apparent reference to The Wall Street Journal.

Four of the Journal’s journalists were last year named as finalists in the US’s Pulitzer Prize for what judges said was their “masterful” reporting that exposed corruption at the highest level of a fragile democracy, leading to “Malaysia’s Watergate”.

Analysts believe Mr Najib, a close ally of successive Australian governments, is preparing the ground for early elections this year. The elections don’t have to be held until 2018.

With opposition leader Anwar Ibrahim in jail on sodomy charges widely seen as politically motivated, the country’s opposition alliance has splintered.

Mr Najib has maintained a tight grip on power through support of powerbrokers in his long-ruling United Malays National Organisation.

                This entry was posted on Thursday, 20 April 2017, 3:38 pm and is filed under
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In race for Malay vote, DAP smear campaign hits new lows

By Zulkifli Sulong

The Malaysian Insight

20 Apr 2017

HOUSEWIFE Normah Yusof is used to getting messages promoting halal products on her smartphone but a recent graphic disgusted her.

The Bahasa Malaysia graphic read “Boycott Chinese-DAP products” in red capital letters against a black background. A smaller sub-heading read: “Kasi lunyai semua kedai kedai Cina DAP” (Let’s bankrupt Chinese-DAP owned shops).

Political analysts said Normah is a typical target for religious and racial rhetoric, as political parties, such as Umno and PAS, ramp up the psychological war in the run-up to the general election speculated to be this year.

However, some PAS leaders are already warning that such campaigns can backfire on the Islamist party, especially for its lawmakers, who were elected by significant portions of non-Muslims in the last general election.

“To all PAS leaders, I humbly hope that you train our members not to say things which can be interpreted as insults or as derogatory to the Chinese community,” Selangor lawmaker Halimah Ali said.

In the 13th general election, Halimah and 14 other PAS state legislators benefitted from droves of non-Muslim votes.

“If there are issues, such as that of Nanyang Siang Pau, then let it be specific to that. Do not lump everyone in one basket,” said Halimah, who is Selat Klang assemblyman.

“There are many Chinese who do not have issues with Islam or PAS,” said Halimah, who also heads PAS’s national unity bureau.

PAS and Umno have gone on the attack against DAP, branding the Chinese-majority, social democratic party as anti-Islam and anti-Malay.

In going after the DAP, they hope to tar its partners in the Pakatan Harapan coalition, which in an had won the popular vote in the 13th general election.

Umno hopes to create the perception among Malays that the four-party PH is being led by the DAP, playing on their fears of being ruled by the minority Chinese.

Umno leaders, such as Wanita chief Shahrizat Abdul Jalil, warn Malays that DAP strongman Lim Kit Siang will be prime minister if PH wrests control of Putrajaya from Barisan Nasional.

PAS has also upped its vitriol against DAP after the latter opposed its parliamentary bill to amend a law that would enhance punishments for shariah offences.

PAS president Abdul Hadi Awang, who carried the bill called RUU355, scathingly called the DAP “a seed from the crap” of the Singaporean People’s Action Party.

When the Chinese newspaper Nanyang Siang Pau published a caricature of Hadi and parliamentary speaker Pandikar Amin Mulia as monkeys, PAS activists mobbed its offices, demanding an apology.

Mohamad Hisomuddin Bakar of the think-tank Ilham Centre said such racial vitriol can have an impact on rural Malay voters whose access to alternative information is limited.

“Urban voters are savvier and can spot such rhetoric as a tactic to divert their attention from more pressing issues,” said Hisomuddin.

For Normah, the housewife, the anti-DAP graphic was extreme and she did not hesitate to delete it.

“This is rubbish. Do they think people are really that stupid?” – April 20, 2017.

                This entry was posted on Friday, 21 April 2017, 10:19 am and is filed under
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Najib responsible for the most heinous fake news any government has concocted with the official version that the global kleptocratic 1MDB scandal does not exist

In his speech to the World Association of Newspapers and News Publishers (WAN-IFRA) Asia Media Awards on Wednesday night, the Prime Minister Datuk Seri Najib Razak spoke about the need to combat the “plague of false and fake news” in the social media and foreign newspapers.

He has however conspicuously omitted the plague of false and fake news in the mainstream media in Malaysia, in particular those owned and controlled by UMNO/BN, which have blazed the path of transforming “newspapers” into “lies-papers”.

False and fake news, whether in social media, foreign newspapers or in local mainstream media, must be equally combatted, exposed and condemned for they are designed not only to distort truth, but deceive the people about the true facts and situation.

In this connection, the greatest surprise in the Prime Minister’s speech at the international media event was his total omission, without any single mention, of the global kleptocratic 1MDB scandal which had haunted and hounded the country and Malaysians for the past two years.

Najib is in fact responsible for the most heinous fake news any government has concocted with the official government version that the global kleptocratic 1MDB scandal does not exist.

In his speech, Najib referred to “a well-known foreign newspaper” which he alleged to be “printing lies about the Government”.

Everybody knows that Najib was referring to the Wall Street Journal, which had worked assiduously and consistently on the global kleptocratic 1MDB scandal.

Are the stacks of Wall Street Journal reports about the 1MDB scandal sheer “lies” against Najib and the  Malaysian Government, and if so, why have Najib and his government  not been able to expose these lies – or do what Najib had threatened all the way back to July 2015, to sue Wall Street Journal?

Far from regarded as “lies”, five of the Wall Street Journal journalists Tom Wright, Bradley Hope, Simon Clark, Mia Lamar and James Hookway were named last April  as finalists in the United States’ 2016 Pulitzer Prize for what judges said was their “masterful” reporting that exposed corruption at the highest level of a fragile democracy, leading to “Malaysia’s Watergate”.

It is pertinent and salutary to read the submission by the Wall Street Journal editor-in-chief Gerard Baker when submitting nine WSJ reports on the global kleptocratic 1MDB scandal by the five journalists which appeared in 2015 for the 2016 Pulitzer Prize for International Report, viz:

“The Wall Street Journal’s coverage of Malaysia – a key U.S. ally in Southeast Asia – exposed in painstaking detail a major political and financial scandal that has shaken one of the world’s most entrenched ruling parties. The story became Malaysia’s Watergate, with secret payments, missing money and a brass-knuckle political cover-up.

“A team of 10 Journal reporters in seven countries, spearheaded by Tom Wright and Bradley Hope, spent six months untangling a giant financial web centered on 1MDB. They combed through thousands of pages of financial records and government documents and tracked down dozens of local Malaysian officials to prove that money from 1MDB was used for political campaigning. They followed the money trail from Malaysia to the Middle East, Switzerland, Australia and the U.S. to unravel a series of complex transactions that involved a politically connected Malaysian conglomerate, charities controlled by the prime minister, Swiss private banks, off-shore shell companies and a government investment fund in Abu Dhabi.

“Their revelations started with an exclusive story that revealed how a government-backed investment fund run by the prime minister was really a huge hidden political-funding machine that helped the ruling party win a tight national election in 2013.

“That story was the first to connect the fund to spending by the ruling party and to the prime minister, Najib Razak, putting the Journal’s coverage ahead of other media. It quickly led to an exclusive story that exposed $700 million in deposits made to Mr. Najib’s personal bank accounts. The money came from companies linked to the fund, 1Malaysia Development Bhd, known as 1MDB, which was supposed to be pursuing economic development for the Southeast Asian country.

“The reporters pursued the story at considerable risk. Despite a reputation as a multi-ethnic democracy, Malaysia has a track record of severe harassment and intimidation of the government’s political opponents and the media. The government shut down two media organizations that aggressively reported the 1MDB story. The opposition leader who won the popular vote in 2013 is in prison.

“After the initial stories, the Journal was facing fears that its Kuala Lumpur bureau could be targeted by authorities and was operating under the threat of a lawsuit by the prime minister. When Tom Wright visited Malaysia, word came back to another reporter that the prime minister’s cabinet was debating whether to arrest Tom at the airport as he left the country.

“Instead, Tom took an early morning drive to the land border with Singapore and left without incident.

“Soon after the Journal’s story on Mr. Najib’s bank accounts — which was repeatedly cited inside and outside Malaysia — tens of thousands took to the streets to demand the prime minister’s ouster. When he heard about Mr. Najib’s bank accounts, the deputy prime minister used the dramatic Malay word ‘menggemparkan,’ meaning ‘shocking’ or ‘earthquake’ to describe the news.

“1MDB is now the subject of 10 investigations in Malaysia and in six other countries. It is selling off assets to repay $11 billion in debt that it has amassed since 2009. The fund used Goldman Sachs to borrow money quickly and quietly, earning the Wall Street firm hundreds of millions of dollars in fees. The Journal’s reporters showed that Goldman was actively targeting countries like Malaysia where it believed it could earn high fees.

“The risks of government investment funds are not confined to Malaysia. Sovereign-wealth funds like 1MDB grew dramatically elsewhere in the world but are struggling now because of weak commodity prices. They are borrowing billions and selling assets, but because many disclose little about their holdings or operations they are a black box in the world financial system.

“The Journal’s coverage didn’t just expose the details of a Malaysian prime minister’s slush fund. It also revealed a level of corruption that went far beyond the day-to-day payoffs that had become accepted in a young nation’s political system.”

The serious issues raised in this damning and sobering indictment of the global kleptocratic 1MDB scandal more than a year ago still awaits a convincing response from Najib – in fact, have become  even more compelling and imperative which cannot be dispelled with the continued pretence that the international money-laundering scandal does not exist.

Is Najib  prepared to issue a White Paper to lay to rest all the “false and fake news” about the global kleptocratic 1MDB scandal?

                This entry was posted on Friday, 21 April 2017, 1:44 pm and is filed under
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14th General Election critical test whether Malaysia can be normal democratic country where voters can peacefully and democratically elect the Federal government they want

This year, Malaysians celebrate the 60th Merdeka Day and 57th Malaysia Day anniversaries, and this is an important milestone to review our national successes and failures.

Despite thirteen General Elections in nearly six decades, Malaysia has yet to become a normal democratic country where voters can change the party or political coalition in government peacefully and democratically through the ballot box like other mature democracies without threats of national catastrophes.

In the past 60 years, there had been six democratic and peaceful changes of government in the United Kingdom, but not a single time in Malaysia.

In Asia, Japan, India, South Korea, Taiwan and even Philippines and Indonesia have more democratic traditions and practices than Malaysia, as the Japanese, Indians, South Koreans, Taiwanese and even  Filipinos and Indonesians can use the ballot box to change the party or political coalition in power without any national disaster or calamities.

The case of South Korea should be a salutary reminder of how far we as a nation  have fallen short of our expectations when we achieved Merdeka on August 31, 1957.

Sixty years ago, South Korea was very poor and backward, with a per capita GNP which is only one-third in this country. Today, South Korea is one of the richest, most developed and prosperous nations in the world.

Sixty years ago, any notion of democracy and human rights in South Korea was non-existent as it was ruled by a dictatorship. But today, the South Korean Parliament could impeach the South Korean President and eight judges of the South Korean Constitutional Court could unanimously uphold the impeachment of the South Korean President by the South Korean Parliament on charges of corruption and cronyism.

Can Malaysians to do the same thing against “MO1” which had earned for the country the international infamy and ignominy of a “global kleptocracy”?

Why is Malaysia so backward and behind South Korea in political and economic developments today, when we were ahead of South Korea on both scores sixty years ago.

All Malaysians should ask these question and look for the answers – why after six decades of nationhood, we failed to be an example and showcase to the troubled world as to how diverse races, languages, religions, cultures and civilisations could successfully co-exist and integrate to build a united, harmonious, purposive, democratic, just, progressive and prosperous nation.

The impending 14th General Election will be a  critical test whether Malaysia can be a normal democratic country where voters can peacefully and democratically elect the government they want for  the country.

Are all political parties and leaders  prepared to prove their democratic credentials by declaring clearly and unequivocally that they would respect and abide by their voters’ choice expressed through the ballot box on general election day, including a peaceful and democratic change of the Federal Government?

(Speech at the DAP Pekan Nenas dinner in Pontian on Saturday, April 22, 2017 at 8pm)

                This entry was posted on Sunday, 23 April 2017, 2:54 pm and is filed under
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UMNO/BN leaders and strategists expect UMNO, MCA, Gerakan and MIC to lose more seats in 14GE and this is why they are cranking up their campaign of lies, hate and fear, especially the triple lie-hate-fear tactics that if UMNO loses, the Malays will lose political power

The 14th General Election is getting closer and we can detect certain panic in UMNO/BN leadership quarters.

This is because some  UMNO/BN leaders and strategists expect UMNO, MCA, Gerakan  and MIC to lose more parliamentary seats in the 14th General Election, which is why they are cranking up their campaign of lies, hatred and fear, especially the triple lie-hate-fear tactics that if UMNO loses, the Malays will lose political power in the country.

This is a downright lie, for whatever happens in the 14th General Election, whether UMNO/BN is defeated by the Pakatan Harapan of PKR, Amanah, Pribumi Bersatu and DAP, the Malays will not lose political power in the country, for the following four reasons:

Firstly
, the 14th General Election is not a battle of UMNO vs DAP. It will be a battle between the Barisan Nasional led by UMNO and the Pakatan Harapan coalition of PKR, Parti Amanah,   Parti Pribumi Bersatu Malaysia (PPBM) and DAP  to save Malaysia from a kleptocracy by defending the founding Constitutional principles of a democratic, just and united plural Malaysia.

Secondly
, DAP is not anti-Malay or anti-Islam. DAP is not a Chinese party as right from the beginning of our formation 50 years ago, we were committed to the principles and vision of a Malaysian party, led by Malaysians and serving the interests of all Malaysians, regardless of race, religion or region.

Thirdly
, whatever happens in the 14GE, whether Najib is toppled as Prime Minister or UMNO loses the Federal Government, the Malays in Malaysia will continue to exercise political power in the country as there is no way they will lose their political power.

This is guaranteed by three demographic reality in the country: (i)  the population make-up, where in 2010, the percentage of Malays in the Malaysian population increased to 55.07%, Chinese reduced to 24.34%, Indians dropped to 7.35%, non-Malay Bumiputeras maintained at 11.94% and 1.3% others; (ii) During the 13th general election, 52.63% of the voters were Malays, 29.68% Chinese, 7.31% Indians, 8.96% non-Malay Bumiputeras and 1.43% others; and (iii) Out of the 165 Parliamentary seats in Peninsular Malaysia, 114 are Malay majority seats representing some 70%, 22 Chinese majority seats (13%) and 29 mixed seats. There is not a single Indian majority seat.

Fourthly
, a Pakatan Harapan Federal Government will compete with UMNO and Barisan Nasional to have a better record in upholding the fundamental features of the Malaysian Constitution and look after the rights and interests of all Malaysians, whether Malays, Chinese, Indians, Ibans, Kadazans, Orang Asli because a Pakatan Harapan Federal government does not want to be a one-term government but be able to continue to get the mandate of the electorate in subsequent polls to govern Malaysia. This means that a Pakatan Harapan government will have to prove to be better government than UMNO/BN  in looking after the rights and interests of all Malaysians, regardless of race, religion or region!

In the past four months, UMNO/BN mainstream media like Utusan Malaysia, New Straits Times, Berita Harian and Star have become  “lies-papers” as part of the UMNO/BN campaign to demonise Pakatan Harapan leaders and myself, where I am described as a devil, puaka, even jembalang; that I am anti-Malay, anti-Islam; cause of May 13, 1969 riots; a communist; a stooge of foreign powers; that I dominate Pakatan Harapan and made other leaders like Tun Mahathir, Datuk Seri Anwar Ibrahim, Datuk Seri Wan Azizah, Tan Sri Muhyiddin Yassin, Datuk Seri Azmin Ali and Mohamad Sabu as my stooges and puppets – all sorts of “unspeakable evil” under the Malaysian sun!

This is not because I have suddenly, after 51 years in politics, become the No. 1 threat to  UMNO/BN government, but an indication of the fear and even panic of some UMNO/BN leaders and strategists that UMNO/BN could lose  the 14GE.

So the  rationale for the escalation of the campaign of lies, hate and fear against DAP and Pakatan Harapan leaders.

The 14th general election will be a test whether the UMNO/BN campaign of lies, hate and fear can be successful in misleading the  voters to continue to  support a kleptocratic Malaysia or whether the information age has changed the political and electoral equation and dynamics in the country by creating  greater political awareness among Malaysian voters, including in  the semi-urban and rural areas,  to  vote for  a democratic Malaysia!

(Speech at the DAP Pengkalan Rinting  dinner in Johor Baru on Saturday, April 22, 2017 at 10pm)

                This entry was posted on Sunday, 23 April 2017, 4:09 pm and is filed under
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Is Malaysia fast becoming a rogue state in today’s international society?

The  Information Ministry’s Special Affairs Division (Jasa), which has been assigned the special task of exonerating the Prime Minister, Datuk Seri Najib Razak and the Malaysian government of any responsibility for the 1MDB kleptocratic scandal, made a startling statement when its director general, Datuk Mohd Puad Zakashi, said that the arbitration settlement between 1MDB and Abu Dhabi’s International Petroleum Investment Corporation (IPIC) has “weakened” US Department of Justice (DOJ) civil suits and claims that the 1MDB funds were stolen.

Puad may not have realized it, but his statement was as good as a government admission that the US DOJ has a case to apply for the forfeiture of more than US$1 billion of 1MDB-linked assets, but the Malaysian government believes that the arbitration settlement has weakened the suits from the  evidential aspects.

Whether this is so is open to dispute, but it is most startling, to say the least, that the Malaysian government, which has completely denied that there is a 1MDB scandal, both nationally and internationally, suddenly accepting the scenario that DOS had a case to apply for the forfeiture of over US$1 billion of 1MDB-linked assets – subject to the availability of adequate evidential material to prop up the kleptocratic suits.

If the Malaysian government’s stand is that there is no 1MDB scandal at all, that all the 1MDB allegations are the “fevered imaginations” of those with ill-intentions to the Najib government, including several foreign nations, then Puad and the Malaysian Government should be consistent in holding that there is simply no case whatsoever for the DOJ lawsuits – and not talking about the “weakening” of DOJ law suits as a result of the 1MDB-IPIC arbitration agreement!

The design to present the 1MDB-IPIC arbitration settlement as concrete proof that there is no 1MDB scandal in the first place, that it was all a plot by “vested interests” causing “foreign authorities…chasing their own tails” have been undermined not only  by Fuad’s  ambivalent position but by today’s news  reports of Italy as the latest foreign country to join the international ranks of nations mounting a probe related to the 1MDB scandal.

It boggles the imagination that the institution of the largest US kleptocratic litigation to forfeit over US$1 billion of 1MDB-linked assets, the closure of two Swiss banks and the jailing of a number or private bankers related to the 1MDB scandal in Singapore,  and the investigations by the prosecutorial and financial authorities in  UK, Switzerland, Luxemburg, UAE, Hong Kong and Australia are   all dismissed  by the Malaysian authorities as “foreign authorities…chasing their own tails” in the international 1MDB money-laundering scandal.

Is Malaysia fast  becoming a rogue state in today’s international society?

                This entry was posted on Wednesday, 26 April 2017, 4:25 pm and is filed under
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Italians probe Emirati for alleged insider trading in UniCredit

Davide Ghiglione in Milan, Simeon Kerr in Dubai and Caroline Binham in London

Financial Times

APRIL 24, 2017

Prosecutors looking at involvement of a former managing director of Abu Dhabi’s Ipic

Italian prosecutors are investigating a former Emirati sovereign wealth fund official over allegations of insider trading in UniCredit shares in 2010 as the fallout from the Malaysian 1MDB scandal spreads through Abu Dhabi’s overseas investment portfolio.

Prosecutors in Milan placed Khadem al-Qubaisi, the jailed former managing director of Abu Dhabi’s International Petroleum Investment Company (Ipic), under investigation “several months ago,” said a person briefed on the probe.

The Italian prosecutor’s office confirmed the probe and said it is “currently working to collect the final elements” for the investigation. A spokesman for the office declined to comment further.

The authorities are looking into whether Mr Qubaisi illegally used confidential information to authorise trading by Falcon Private Bank in UniCredit’s shares — for an alleged gain of about €21m — when Ipic’s Aabar division was preparing to take a 5 per cent stake in Italy’s largest bank by assets in 2010.

“The order to buy the [UniCredit] shares and sell them came from his bank, at a moment in which the news was still quietly secret and had not been disclosed to the market,” said one of the people. Falcon is another unit of Ipic.

The alleged trading was uncovered as part of the global investigation into the 1MDB scandal, which involves an alleged plot to steal billions of dollars from the Malaysian sovereign wealth fund.

Ipic, which in January merged with Mubadala, another Abu Dhabi sovereign fund, declined to comment. Mr Qubaisi’s lawyer and UniCredit also declined to comment.

Zurich-based Falcon is facing criminal proceedings by the Swiss attorney-general’s office relating to 1MDB.

Prosecutors in Milan have also requested information from UniCredit, which one person said has been “collaborating” with authorities.

The Swiss attorney-general’s office said it “received and executed a request for mutual legal assistance from Italy in this context”.

The investigation into insider trading in UniCredit shares is the latest in a string of controversies involving Mr Qubaisi, once a close associate of Sheikh Mansour bin Zayed Al Nahyan, owner of Manchester City football club.

He is in jail in the capital of the United Arab Emirates while Abu Dhabi authorities investigate his alleged involvement in the 1MDB scandal.

The US Department of Justice has alleged he received $473m of money diverted as part of a conspiracy to misappropriate $1.37bn from two Ipic-guaranteed bonds issued by 1MDB in 2012 worth $3.5bn.

The insider trading probe regarding Mr Qubaisi, previously a central actor in the emirate’s overseas investment strategy, casts a further shadow over his role at Ipic.

In 2015, it emerged that a private company belonging to Mr Qubaisi took a lease in a Madrid building that later became the headquarters of Spanish energy company Cepsa, a subsidiary of Ipic.

The fresh allegations around Mr Qubaisi come as US bank Wells Fargo launched a legal fightback against a move by the DoJ to seize a Manhattan hotel as part of a 1MDB-related $1bn asset freeze.

US prosecutors moved in July to freeze a list of trophy assets including the Park Lane Hotel, Van Gogh paintings and the rights to profit from the film The Wolf of Wall Street as part of their 1MDB anti-money laundering probe.

The hotel, where rooms typically go for $500 a night, is owned by a vehicle known as Symphony, as well as by Abu Dhabi’s Mubadala fund.

The DoJ alleges that Jho Low, a Malaysian businessman at the heart of the scandal, diverted $200m of 1MDB funds to buy a controlling stake in Symphony, which went on to buy the hotel for $650m in 2013 from the estate of the Helmsley family.

Wells Fargo argues in its legal challenge to the forfeiture, filed in a Los Angeles court last week, that it is still owed $267m from a mortgage taken out by Symphony and asked the court to block the DoJ’s planned seizure of the hotel as it would impact the bank’s “interests as lender and lienholder”.

Wells Fargo denied any knowledge about what the DoJ alleges was the true source of Symphony’s funds. Wells Fargo declined to comment, while the DoJ did not respond to requests seeking comment.

The challenge by Wells Fargo follows a similar move against the DoJ’s asset freeze by Riza Aziz, stepson of the Malaysian prime minister, Najib Razak, and co-founder of the Hollywood studio behind the Wolf of Wall Street.

In January, a court victory in New Zealand paved the way for Mr Low and his family to contest the asset seizure.

Mr Low and Mr Najib, the Malaysian prime minister who is also the former chairman of 1MDB’s advisory board, have previously denied wrongdoing.

                This entry was posted on Wednesday, 26 April 2017, 6:35 pm and is filed under
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Malaysia to Pay $1.2 Billion to Abu Dhabi Fund Over 1MDB Scandal

By NEIL GOUGH

New York Times

APRIL 24, 2017

HONG KONG — In 2012, with help from Goldman Sachs, a Malaysian sovereign wealth fund called 1Malaysia Development Berhad sold $3.5 billion worth of bonds backed by an Abu Dhabi government fund to help it purchase power plants.

But behind the scenes, American officials have claimed, nearly $1.45 billion was illegally redirected to Swiss bank accounts and ultimately into the hands of some of the people involved in the deal.

That deal is now part of an international investigation into the Malaysian fund, known as 1MDB, that has plagued Najib Razak, the prime minister of Malaysia. A civil complaint filed by Justice Department officials in the United States said that some of the funds landed in the hands of Mr. Najib’s friends and associates as well as officials and executives from Abu Dhabi’s sovereign wealth fund.

On Monday, Malaysia and Abu Dhabi moved to clean up one part of the scandal: who would pay back investors who bought the bonds.

The Abu Dhabi fund, the International Petroleum Investment Company, said in a stock exchange announcement in London that Malaysia’s finance ministry and 1MDB had agreed to pay $1.2 billion to the Abu Dhabi fund by the end of the year as part of an agreement overseen by an arbitration panel in London.

The settlement also calls for the Malaysian side to take over all interest and principal payments on the two 2012 1MDB bonds, which charge interest rates of nearly 6 percent and are due for full repayment by 2022.

The deal on Monday is a significant step forward in cleaning up the financial mess related to 1MDB. One year ago, 1MDB defaulted on the bonds, setting off a dispute between the two countries over who would pick up the tab. Last year, the Abu Dhabi fund and its subsidiary, Aabar Investments PJS, said they were taking both 1MDB and Malaysia’s finance ministry to arbitration in London, seeking $6.5 billion.

But 1MDB isn’t out of the woods yet. The fund remains the subject of investigations in Singapore, Switzerland, the United States and other jurisdictions. American officials are still seeking to recoup $1 billion they say was ultimately spent in the United States on purchases like luxury homes in Manhattan and Los Angeles and expensive paintings by Picasso and Monet, and on financing for the Hollywood movie “The Wolf of Wall Street.”

In Singapore, officials have closed branches of two Swiss banks and jailed a number of private bankers in relation to the case.

Officials in several jurisdictions have highlighted transfers involving Low Taek Jho, also known as Jho Low, a young Malaysian financier who partied with the likes of Paris Hilton. American officials say Mr. Low played a crucial role in laundering hundreds of millions of dollars from 1MDB into the United States.

Mr. Low and Mr. Najib have previously denied wrongdoing.

“The government is pleased that IPIC and 1MDB have resolved their differences in an amicable manner,” Tengku Sariffuddin, the press secretary to Mr. Najib, said in a written statement on Monday.

“These significant events represent the continued positive progress made by 1MDB,” he added.

Goldman Sachs — which, according to American officials, received fees as high as 11 percent of the proceeds from the two 1MDB bond sales, which were code-named Magnolia and Maximus — put its main banker on the 1MDB account, Tim Leissner, on leave last year. Mr. Leissner has since left the bank, and in March, Singapore regulators banned him from dealing in securities in the city for 10 years. Goldman has said it is cooperating with the investigations.

Abu Dhabi dismissed the head of IPIC, Khadem al-Qubaisi, in 2015. That year, it also dismissed Mohamed Ahmed Badawy Al-Husseiny as the chief executive of one of IPIC’s subsidiaries, Aabar Investments PJS, which was tied to the 1MDB deals. Both men were identified by American officials in their civil lawsuit in July.

IPIC did not return phone calls and a fax to its headquarters in Abu Dhabi on Monday, and attempts to reach Mr. Qubaisi through his former employer were unsuccessful.

                This entry was posted on Wednesday, 26 April 2017, 12:29 pm and is filed under
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Chequebook diplomacy

By Una Galani

BreakingViews

Reuters

27 April 2017

 Malaysia will bear most of the burden of 1MDB. Abu Dhabi helped the Southeast Asian nation finance the upstart sovereign fund back in 2012. It subsequently looked like the Gulf emirate would share a large part of the multi-billion dollar fallout relating to the fund, now the focus of money-laundering probes around the world. But Malaysia is throwing its chequebook at the problem, paying up to try to repair relations between the two states before Prime Minister Najib Razak seeks re-election.

A debt settlement agreement announced on Monday addresses most of the lingering financial mess. 1MDB will repay a $1.2 billion loan to IPIC by the end of this year. It will also re-assume responsibility for two bonds, which will cost another $4.8 billion including interest.

The Malaysian investor had initially played hardball with Abu Dhabi. It stopped paying coupons on the notes last year after the pair fell out over a separate $3.5 billion payment that went missing. 1MDB paid that amount to an entity with a similar name to a unit of IPIC, which the latter has claimed it never received.

Executives from the Abu Dhabi outfit were later named in U.S. lawsuits seeking to seize $1 billion of assets, which prosecutors claim were bought with money stolen from 1MDB. The pair have agreed to enter discussions about this final part of the dispute outside of court. But it is unlikely the funds will be fully recovered.

The entire agreement is backstopped by the Malaysian finance minister – Najib himself. So effectively the outstanding liabilities of 1MDB, now mostly a shell company, sit squarely with the taxpayer. That is, unless one or both sides renege on the deal, as they did with a previous settlement in 2015.

Najib is in a strong position ahead of a general election, which may take place later this year. The opposition is weak and he has few strong internal rivals within the ruling party. But the ongoing global investigations around the vehicle that he helped create could yet throw up nasty surprises – and this deal suggests Najib is uneasy of the threat that poses. Patching up relations with Abu Dhabi removes one potential source of bad news, and is the first step to repairing ties with a key ally, albeit at a high price.

                This entry was posted on Thursday, 27 April 2017, 1:30 pm and is filed under
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The “overkill” campaign to convince Malaysians that 1MDB scandal has finally been resolved with the 1MDB-IPIC “arbitration settlement” boomeranged as many basic questions remain unanswered

After the “arbitration settlement” between 1MDB and Abu Dhabi’s International Petroleum Investment Corporation (IPIC), the UMNO/BN Government propaganda machinery went into an overdrive to convince Malaysians that the 1MDB international kleptocratic  money-laundering scandal had been resolved and settled once and for all.

But  the propaganda campaign committed the fatal sin of doing an “overkill”, like the claims by the Barisan Nasional strategic communications director, Datuk Seri Abdul Rahman Dahlan, causing a boomerang as many basic questions about the 1MDB scandal, which had hounded and haunted Malaysians with the infamy and ignominy of a global kleptocracy, remain unanswered.

Examples of such propaganda overkill, which aroused more doubts and questions, are  Abdul Rahman’s claims that the “arbitration settlement” shows that 1MDB funds did not end up in Prime Minister Datuk Seri Najib Razak’s pockets or that the 1MDB funds held in “units” in Singapore exist and will be monetized to pay IPIC – as they do not have such results.

Thanks to Abdul Rahman, these questions have returned to the centre-stage of public concern, together with other questions like “Why Malaysians have now to pay IPIC more than double what was actually borrowed by 1MDB” (asked by DAP MP for PJ Utara), “Where did the money paid by 1MDB go” (asked not only by former Prime Minister Tun Dr. Mahathir Mohamed but also by UMNO MP for Kulim Bandar Baru and Public Accounts Committee member, Datuk Aziz Sheikh Fadzir), “Will taxpayers foot 1MDB’s US$1.2b settlement with IPIC” (by PKR MP for Pandan Rafizi Ramli), “Who is buying the 1MDB ‘units’?” (by former Deputy Prime Minister Tan Sri Muhyiddin Yassin), my question yesterday “Is Malaysia fast becoming a rogue state in today’s international society?” among many others.

Is Najib prepared to convene a special session of Parliament to clear Malaysia’s infamy and ignominy of being regarded worldwide as a “global kleptocracy” to give full and detailed answers to all the charges about 1MDB international money-laundering scandal, in particular the nearly year-old  United States Department of Justice (DOJ) largest kleptocratic litigation to forfeit over US$1 billion 1MDB-linked assets in the United States, United Kingdom and Switzerland?

Apart from the question whether 1MDB and the Malaysian government should have responded legally  to the DOJ kleptocratic suits, Malaysia silence for nearly a year to the DOJ’s detailed charges of Malaysia as a global kleptocracy because of the international 1MDB money-laundering scandal is most deafening.

This is obvious when we refer to Paragraphs 6-12 to the 513-Paragragh 136-page DOJ lawsuit on 1MDB, which state:

“6. 1MDB was ostensibly created to pursue investment and development projects for the economic benefit of Malaysia and its people, primarily relying on the issuance of various debt securities to fund these projects. However, over the course of an approximately four-year period, between approximately 2009 and at least 2013, multiple individuals, including public officials and their associates, conspired to fraudulently divert billions of dollars from 1MDB through various means, including by defrauding foreign banks and by sending foreign wire communications in furtherance of the scheme, and thereafter, to launder the proceeds of that criminal conduct, including in and through U.S. financial institutions. The funds diverted from 1MDB were used for the personal benefit of the co-conspirators and their relatives and associates, including to purchase luxury real estate in the United States, pay gambling expenses at Las Vegas casinos, acquire more than $200 million in artwork, invest in a major New York real estate development project, and fund the production of major Hollywood films. 1MDB maintained no interest in these assets and saw no returns on these investments.

“7. The criminal conduct alleged herein occurred in three principal phases:

“8. The “Good Star” Phase: The fraudulent diversion of funds from 1MDB began in approximately September 2009, soon after 1MDB’s creation. Between 2009 and 2011, under the pretense of investing in a joint venture between 1MDB and PetroSaudi International (“PetroSaudi” or “PSI”), a private Saudi oil extraction company, officials of 1MDB and others arranged for the fraudulent transfer of more than $1 billion from 1MDB to a Swiss bank account held in the name of Good Star Limited (“Good Star Account”). Officials at 1MDB caused this diversion of funds by, among other things, providing false information to banks about the ownership of the Good Star Account. Contrary to representations made by 1MDB officials, the Good Star Account was beneficially owned not by PetroSaudi or the joint venture, but by LOW Taek Jho, a/k/a Jho Low (“LOW”), a Malaysian national who had no formal position with 1MDB but was involved in its creation. LOW laundered more than $400 million of the funds misappropriated from 1MDB through the Good Star Account into the United States, after which these funds were used for the personal gratification of LOW and his associates.3

“9. The “Aabar-BVI” Phase: In 2012, 1MDB officials and others misappropriated and fraudulently diverted a substantial portion of the proceeds that 1MDB raised through two separate bond offerings arranged and underwritten by Goldman Sachs International (“Goldman”). The bonds were guaranteed by both 1MDB and the International Petroleum Investment Company (“IPIC”), an investment fund wholly-owned by the government of Abu Dhabi, in the United Arab Emirates (“U.A.E.”). Beginning almost immediately after 1MDB received the proceeds of each of these two bond issues, 1MDB officials caused a substantial portion of the proceeds – approximately $1.367 billion, a sum equivalent to more than forty percent of the total net proceeds raised – to be wire transferred to a Swiss bank account belonging to a British Virgin Islands entity called Aabar Investments PJS Limited (“Aabar-BVI”).

“10. Aabar-BVI was created and named to give the impression that it was associated with Aabar Investments PJS (“Aabar”), a subsidiary of IPIC incorporated in Abu Dhabi. In reality, Aabar-BVI has no genuine affiliation with Aabar or IPIC, and the Swiss bank account belonging to Aabar-BVI (“Aabar-BVI Swiss Account”) was used to siphon off proceeds of the 2012 bond sales for the personal benefit of officials at IPIC, Aabar, and 1MDB and their associates. Funds diverted through the Aabar-BVI Swiss Account were transferred to, among other places, a Singapore bank account controlled by TAN Kim Loong, a/k/a Eric Tan (“TAN”), an associate of LOW. Those funds were thereafter distributed for the personal benefit of various individuals, including officials at 1MDB, IPIC, or Aabar, rather than for the benefit of 1MDB, IPIC, or Aabar.

“11. The “Tanore” Phase: In 2013, several individuals, including 1MDB officials, diverted more than $1.26 billion out of a total of $3 billion in principal that 1MDB raised through a third bond offering arranged by Goldman in March 2013. The proceeds of this bond offering were to be used by 1MDB to fund a joint venture with Aabar known as the Abu Dhabi Malaysia Investment Company (“ADMIC”). However, beginning days after the bond sale, a significant portion of the proceeds was instead diverted to a bank account in Singapore held by Tanore Finance Corporation (“Tanore Account”), for which TAN was the recorded beneficial owner. Although the Tanore Account had no legitimate connection to 1MDB, the then-Executive Director of 1MDB was an authorized signatory on the account. 1MDB funds transferred into the Tanore Account were used for the personal benefit of LOW and his associates, including officials at 1MDB, rather than for the benefit of 1MDB or ADMIC.

“12. The proceeds of each of these three phases of criminal conduct were laundered through a complex series of transactions, including through bank accounts in Singapore, Switzerland, Luxembourg, and the United States.”

These seven paragraphs as well as the DOJ forfeiture suits of the over US$1 billion 1MDB-linked assets debunk any claim by the UMNO/BN government propagandists that the IMD-IPC “arbitration settlement” has fully and  finally resolved  the 1MDB scandal and cleared Malaysia of the ignominy and infamy of being regarded worldwide as a global kleptocracy.

                This entry was posted on Thursday, 27 April 2017, 7:47 am and is filed under
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1MDB Prosecutors Said to Eye Ex-Goldman Banker’s Money Moves

by Greg Farrell , Andrea Tan , and Keri Geiger

Bloomberg

April 28, 2017

U.S. prosecutors investigating Goldman Sachs Group Inc.’s role in raising almost $6 billion for Malaysia’s 1MDB investment fund are asking questions about money flowing through accounts linked to Tim Leissner, the lead banker behind the transactions, according to people familiar with the matter.

Officials from the Federal Bureau of Investigation and Justice Department have been interviewing bankers familiar with 1Malaysia Development Bhd. about Leissner’s network of relationships with politically connected Malaysians, said the people, who asked not to be named because the queries aren’t public.

In interviews as recent as last month, the people said, the U.S. officials asked about the association between Leissner, who left Goldman Sachs in February 2016, and Low Taek Jho, who the Justice Department said in July was at the center of a scheme that siphoned more than $3 billion dollars from 1MDB. U.S. investigators are asking in particular whether money was sent from a Leissner-linked account to an entity controlled by someone tied to the Malaysian government, one of the people said. Leissner’s attorney, Marc Harris, declined to comment. An official who answered the phone at Low’s Hong Kong-based company Jynwel Capital said he wasn’t available.

It’s not the first time U.S. officials have scrutinized personal transactions of Goldman’s lead banker for troubled 1MDB. U.S. authorities said last year in court filings that several million dollars from 1MDB ended up in an account belonging to 1MDB’s top lawyer Jasmine Loo. She later transferred several thousand dollars to Leissner, people familiar with the matter have said. Attempts to reach Loo weren’t successful.

The U.S. look into 1MDB money flows is part of a globe-spanning effort. Switzerland, Singapore, Hong Kong, Luxembourg and other countries are also investigating the roles banks and individuals may have played in plowing cash from the fund into luxury real estate, art, lavish parties and even movie productions.

Goldman Sachs and the Justice Department also declined to comment.

No Official Role

Investigators also asked about Leissner’s interactions with Roger Ng, a former Goldman colleague who worked on the 1MDB funding, the person said. Ng, a Malaysian national, was head of Goldman’s Southeast Asian sales and trading business at the time of his resignation in April 2014. Ng, who has not been publicly charged with any crimes, declined to comment when contacted by phone.

At the heart of the 1MDB scheme, according to U.S. prosecutors, was Low. The Malaysian national was an adviser on 1MDB’s creation in 2009, the U.S. said. Bankers at Goldman Sachs understood him to be a liaison from the fund even though he didn’t have an official role there, the government said.

Two years ago, after 1MDB raised suspicions by failing to make a payment on its multibillion-dollar debt, the FBI began investigating Low’s multimillion-dollar acquisitions of trophy properties in Manhattan and Beverly Hills. Low and his associates diverted money raised for development projects into personal accounts and then pumped it into art, penthouses and the production company behind 2013’s “The Wolf of Wall Street,” the U.S. alleged in court documents seeking the seizure of more than $1 billion in assets.

Low has described his role with 1MDB to newspapers as informal consulting that didn’t break any laws.

The fund has consistently denied any wrongdoing. Malaysian Prime Minister Najib Razak, who until last year served as the chairman of 1MDB’s advisory board, has denied any wrongdoing and was cleared by Malaysia’s attorney general.

Goldman’s Role?

U.S. officials also began looking into Goldman Sachs’s role in raising the money for 1MDB, people familiar with the matter have said. Goldman sold almost $6 billion in bonds for 1MDB in 2012 and 2013, when Leissner led the bank’s efforts in Southeast Asia. It earned $593 million, or 9 percent — several times the industry average for underwriting risky bonds.

U.S. prosecutors called attention to those high fees in last year’s forfeiture filings. Without accusing the bank of wrongdoing, the U.S. said that Goldman’s marketing materials for the 1MDB bonds were misleading: Some Goldman circulars said the bond’s proceeds would be used for business purposes, when they in fact enriched Malaysian insiders, according to the filings.

Goldman, in a statement at the time, said the fund was designed to invest in Malaysia and the bank “had no visibility” in whether the money it raised may have been used for other purposes.

Shell Companies

U.S. investigators have gathered information on Leissner-linked accounts before their latest round of queries. In last year’s forfeiture filings, prosecutors said that a 1MDB lawyer had received $5 million, through a series of shell companies, into a Swiss bank account.

The 1MDB lawyer, who wasn’t identified into the complaint, is Jasmine Loo, people familiar with the situation have said. U.S. authorities are investigating a six-figure payment that Loo made to an account belonging to Leissner a year after she left 1MDB, other people familiar with the situation have said.

The U.S. hasn’t accused Loo of wrongdoing. The transfer from Loo was an investment in a startup company that Leissner was backing with her, one of the people familiar with the matter has said.

Goldman Star

Leissner spent nearly two decades at Goldman, where he became a star for his rainmaking skills in Southeast Asia. The German national married former U.S. fashion model and designer Kimora Lee Simmons in 2013.

Once 1MDB came under scrutiny, the bank hired an outside law firm to review its conduct. Goldman discovered that in June 2015, Leissner had provided a letter of reference for Low on company letterhead, something the bank’s management had never approved. The unauthorized letter was cited last month by Singaporean authorities who banned Leissner from working in the securities industry there for 10 years.

Goldman put Leissner on administrative leave in early 2016 and he resigned shortly after. Federal prosecutors then subpoenaed him for questioning in the 1MDB matter, people briefed on the matter said last year. Leissner wasn’t considered a target of the investigation, one person familiar with the situation said at the time.

Within weeks of issuing the subpoena, the government put off the scheduled interview, according to several people familiar with the matter. The meeting ultimately didn’t happen, they said.

                This entry was posted on Friday, 28 April 2017, 7:47 pm and is filed under
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When was Johari removed by the Cabinet or Prime Minister as the final “gatekeeper” for the resolution of the 1MDB scandal?

Although Finance Minister II  Datuk Johari Abdul Ghani has denied contradicting Prime Minister Najib Abdul Razak over the arbitration settlement between 1MDB and International Petroleum Investment Company (IPIC), he has clearly tried to dissociate and distance himself from the settlement.

It is therefore  quite unworthy of him to allege that DAP PJ Utara, Tony Pua, was trying to create a wedge between Najib and him.

When news of the  1MDB-IPIC “arbitration settlement” was first reported in the international media exactly a week ago that 1MDB was on the verge of inking a “settlement” with IPIC, Johari was mentioned as part of the “high powered team” leading the negotiations to resolve the dispute, but this was promptly denied by Johari the very next day from Washington, where he was attending a World Bank meeting –  that he was not involved in the arbitration settlement negotiations and that he had not yet been briefed on the final outcome of the settlement.

This has come as a surprise to all Malaysians – as all this while, everyone, including Members of Parliament, were under the impression that Johari as Finance Minister II had become the  key player in the whole 1MDB imbroglio, in fact the final “gatekeeper” in the resolution of the 1MDB scandal.

In July last year, the Minister for International Trade and Industry, Datuk Mustapha Mohamad said the only Johari and the 1MDB President Arul Kanda Kandasamy  are the Federal Government spokesmen about 1MDB.

Has Johari himself  forgotten all he had said in the past about his confidence about 1MDB’s legal position in the arbitration case and   bringing to book the culprits in the 1MDB scandal?

On 1st August last year, Johari said in an interview that after going through 1MDB’s documents,  he was confident of the company’s legal position and that the arbitration case will go in 1MDB’s favour.

This is what Johari said:  “As far as I am concerned, I am very confident that we will win. I have looked in detail all the documents supplied by 1MDB.

“The dispute is that they (IPIC) do not acknowledge Aabar BVI as their company. But our records show it indeed belongs to them.

“Now suddenly they claim it does not belong to them. Let the arbitration court look at our documents. We need to make sure we fight and win this case.”

Why has  the Malaysian Government done an “about turn” and agreed to the so-called “arbitration settlement” which would involve (i) 1MDB conceding that Aabar BVI is not IPIC company and 1MDB and Ministry of Finance Incorporated (MoF, Inc)  assuming all liabilities from the US$3.5 billion of bonds which were previously guaranteed by IPIC; and (ii) the Malaysian taxpayers having to pay double the US$3.5 billion bailout of 1MDB, or more than double the US$3.5 billion of bond borrowings of 1MDB.

Johari is now talking about a Registrar of Corporate Affairs of British Virgin Islands letter dated August 11, 2016 confirming that Aabar Investments PJS Ltd. (BVI) is a subsidiary of IPIC.

Is there such a letter dated on August 11, 2016 when Johari had said earlier on August 1, 2016 that he was confident that 1MDB will win based on all the documents supplied by 1MDB?

In March this year, Johari said the government could not press charges on 1MDB without a full picture, as whatever has been made public about 1MDB is only half the story. He said ongoing investigations by the various authorities must be completed first as Malaysia is relying on these evidence before any further actions were taken.

Furthermore, any action taken during the arbitration process between 1MDB and IPIC would weaken Malaysia’s position.

Now, without the “full picture” of the 1MDB scandal, Malaysians are asked to look at a “bigger picture” to justify the 1MDB-IPIC “arbitration settlement”, which is most weak and unconvincing, as the “final picture” is none other than  the protection of the “MO1”!

When Johari was appointed as the Finance Minister II, he was supposed to be  the final “gatekeeper” for the resolution of the 1MDB scandal, and hopefully, clear Malaysia’s ignominy and infamy for being regarded worldwide as a “global kleptocracy”.

When did the Cabinet or the Prime Minister remove Johari  from this position to the extent that he was not involved in the final decision-making process for the 1MDB-IPIC “arbitration settlement” saddling Malaysian taxpayers with the  new burden to being responsible for the colossal losses of the international 1MDB kleptocratic  money-laundering scandal, without bringing any 1MDB culprit to book?

                This entry was posted on Friday, 28 April 2017, 9:19 am and is filed under
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1MDB settlement a high price for Malaysia

IFR Asia 989

April 29, 2017

The 1MDB saga reached a predictable and sickening milestone last Monday when the Malaysian investment fund said it had reached an out-of-court settlement with the Middle Eastern guarantor of two US dollar bonds totalling US$3.5bn.

1MDB’s agreement with Abu Dhabi’s International Petroleum Investment Company was predictable, inasmuch as the Malaysian taxpayer will ultimately be on the hook for the fund’s debts, and sickening inasmuch as it left billions of dollars still unaccounted for.

1MDB maintains that it paid US$3.5bn to an IPIC unit, Aabar Investments PJS Limited, in return for IPIC acting as guarantor on the US dollar bonds. IPIC claims that money went to an unconnected company registered in the British Virgin Islands with an uncannily similar name.

IPIC denied last week that Aabar (BVI) was its subsidiary. But Malaysia’s second finance minister Johari Abdul Ghani last week in somewhat desperate fashion, proffered a letter from the Registrar of Corporate Affairs of the British Virgin Islands confirming that it is (or was).

Can the world of international high finance be reduced to something as utterly farcical and absurd? And when it comes to playing the “Whose Baby?” game, I think I would trust the parent to know, rather than a third-party “verifier” from a faraway land of which the main players in this farce probably know very little.

Former Malaysian prime minister Mahathir Mohamad wasted little time in going public last Thursday with questions about where the money paid to Aabar (BVI) ended up.

I recall speaking to two of Asia’s leading bond syndicate heads about one of the placements on the day the trade was made public in 2012, and they suggested that the paper was largely placed on the strength of the IPIC guarantee – alongside the formidable reputation of Goldman Sachs, the sole underwriter.

That guarantee is now null and void, after 1MDB agreed to assume responsibility for all future coupon and principal payments on the 2022 bonds (over US$4.5bn, including interest), and pay another US$1.2bn to IPIC by the end of this year.

MINDFUL OF THE rather bad look of the settlement with IPIC (taxpayers on the hook and all that), 1MDB has said that those monies will be settled mainly through the liquidation of “investment fund units”.

These fabulously vague units have done the rounds ever since the 1MDB scandal erupted with full force around 18 months ago. There was once said to be US$2.3bn of investment units in the Cayman Islands in the name of 1MDB vehicle Brazen Sky, before some US$1.3bn was redeemed and used to pay debts, according to 1MDB. The remainder, still in units, was then placed with private bank BSI in Singapore, an institution which lost its licence last year after breaches of anti-money laundering regulations.

The nebulous nature of these units troubled former 1MDB auditor KPMG sufficiently that it refused to sign off on the company’s 2013 accounts unless 1MDB provided evidence of the units’ valuation, and was promptly sacked for its probity.

Meanwhile former Malaysian Deputy Prime Minister Muhyiddin Yassin last week questioned precisely how 1MDB would be able to monetise the units: for how much and to which buyer?

Perhaps 1MDB will be able to sell them to China General Nuclear Power Corp, which purchased 1MDB’s Edra Energy assets last March, in a move which helped pay the Malaysian fund’s short-term creditors and erase its bank debt.

NATURALLY, 1MDB PORTRAYED the out-of-court settlement last week in suitably upbeat fashion: “This arbitration settlement and monetisation of investment fund units represents the resolution of a significant challenge, and is a major part of the 1MDB rationalisation plan, which is now at its final stages of conclusion.”

Good for them. But it’s not good for the Malaysian taxpayer. Now that leading local political figures such as Mahathir and Muhyiddin are focusing on the IPIC payment, where the original funds went and how 1MDB will honour its near-US$6bn settlement with IPIC and its other outstanding debts, perhaps momentum will gather to have the questions surrounding 1MDB settled once and for all.

Prime Minister Najib Razak, who controls 1MDB in his capacity as the country’s finance minister, has held on to power through an extraordinary array of 1MDB-related events, including the closure of banks and imprisonment of bankers in Singapore, ongoing investigations in Europe and a major civil action from the US Department of Justice. Might this IPIC resolution threaten his position? I’m not holding my breath on that one.

Interested parties – including Malaysian taxpayers – can perhaps look to the DoJ and the new US Attorney General Jeff Sessions for a final answer of sorts. One wonders if the fact that Donald Trump once played golf with Najib and referred to him after the game as “my favourite prime minister” will have any bearing on the proceedings.

                This entry was posted on Saturday, 29 April 2017, 1:53 pm and is filed under
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