Friday, August 28, 2015

Has Singapore seized Najib's Saudi "donation" : Is a Singapore -Malaysia diplomatic war brewing over ownership

by Ganesh Sahathevan

According to the latest reports on the 1 MDB scandal, which have not been denied by anyone,   a  USD 681 million  (and more?) "donation" that Malaysia's Prime Minister Najib Razak says was given  him by some Saudi family  was transferred from Najib's private accounts at AmIslamic Bank in Malaysia to an account in Singapore, which has since been frozen.

Sarawak Report broke the story of how the funds were sent back to Singapore, and in its story provided this diagram:

How the money circulated.... despite numerous payments made to UMNO members in the form of cheques from the AmPrivate Bank account before and after the election

If the reports are correct then it is more likely than not that the Government of Singapore (GOS) has   enforced powers pursuant to that country's money laundering and other provisions that concern the proceeds of crime.These provisions allow the the GOS to forfeit  the proceeds of crime.
Malaysia and Najib will of course want those hundreds of millions back, but it is unlikely that Najib is going to ever convince Singapore of his "donation" story. Meanwhile, the confiscation does appear to be a loss to the Malaysian taxpayer, who ultimately bears the losses arsing from the 1 MDB scandal. If there is a change in leadership in Malaysia, it is likely that the new leadership will make strong representations to the GOS for the return of that money. However history suggests that it will not  be a straight forward matter. Readers may recall how Malaysians who had lived and worked in Singapore had difficulty accessing their CPF savings, and how that became an issue that had to be resolved as part of the negotiations over Malaysia's supply of raw water to Singapore.

Monday, August 17, 2015

Another ASIO fail: Duncan Lewis unaware if not unable to counter foreign government interference at Villawood

by Ganesh Sahathevan

In yet another show of his inability to function in  an intelligence and counter-intelligence role, ASIO head Duncan Lewis has been shown  unaware if not unable to counter foreign government interference at the Villawood Detention Centre.

The matter came  to light  when evidence was recently  sighted suggesting that  a  foreign government  acting via a  local agent had the final say  as to who could or could not visit one of its citizens held at Villawood. One visitor has even been told that he has been permanently barred from visiting the detainee. There is some evidence that the local agent is able to do so with the cooperation of Villawood management.

The  local agent is from the country concerned but  now resides in Australia.
In his communications he quoted the national law enforcement agency of that country as the source of his instructions. His assertion coincides with that of the chief of police of  that country who earlier this year was quoted in media reports as saying that his officers had visited and interrogated the detainee at Villawood.
Those reports had been brought to the attention of Duncan Lewis , his minister George Brandis, and the minister in charge of detention centres, Peter Dutton. Clearly ,nothing has been done.
As I have said before, Duncan Lewis is no spy master. In this case he has been undermined by a local agent of a foreign nation who was once a clerk in the NSW public service.


Wednesday, August 12, 2015

Did 1 MDB & Kanda account for a RM 2.4 Billion discrepancy ; is the discrepancy as high as RM 8.6 billion?

by Ganesh Sahathevan

In June this year 1 MDB and its CEO Arul Kanda provided what they said was an exhaustive and detailed account of how some RM 42 billion in debt had been utilized. They claimed that the figures, provided in their diagram below ,were extracted from information disclosed in 1 MDB's annual financial statements.

Of  special interest to this writer and one imagines  many others, is the utilization of the 1 MDB Global International (1 MDB GIL) USD 3 billion debt issue.

As disclosed in Note 33, Item (p) at pages 112 and 116  of  1 MDB's 2013 Annual Report
the  net proceeds from the 1 MDB GIL  USD 3 billion bond issue in ringgit terms was   RM 8.434254 billion.
Then, according to Note 43 on  page 148 of  1 MDB's 2013 Annual Report,    RM 4900 711 000 was held as investment and  RM 3 276 323 000 in cash at the balance date (31 March 2013)  " in  a financial institution with good credit standing" (this wording is repeated in the  note below, copied and pasted from the 2014 AR.)
One can immediately see that these figures add up to only RM 8.177034000 billion, a discrepancy of RM 257.220 million or approximately USD 83 million (for an explanation of how applicable exchange rates were derived ,and how net  proceeds from the bond issue were corroborated see story below)

That discrepancy of USD 83 million or RM 257.220 million is serious enough and needs answering, but let us get back to the claims made by 1 MDB and Arul Kanda in their exhaustive clarification. For ease of reference the provided this graphic, and as one can see from the very last item that the proceeds from the 1 MDB bond issue stood at RM 5.1 billion ringgit at the last balance date ,that is 31 March 2014. Assuming that all the RM 0.9 billion surplus cash is also from the net proceeds of the bond issue, then one has a total of RM 6 billion, short of some RM 2.4 billion of the total amount.

At this point, one needs to compare what 1 MDB and Kanda have said against what has been disclosed in 1 MDB's  audited financial statements, and according to the financial statements for the year ended 31 March 2014, the excess over the  RM 4900 711 000  that was not placed in various investment portfolios at a "financial institution with good credit standing" was used for "working capital and debt repayment purposes". This is not however what 1 MDB and Kanda have said.
 Where reference is made to working capital it has been bundled with finance costs (ie interest) and no mention is made of "debt repayment". Given the very specific nature of the 1 MBD GIL bond issue one would expect that the utilization of that source of funds would have been separately disclosed, but it has not.

 Then, it is also important to keep in mind that the figure  of RM 5.1 billion may represent some RM 200 million in capital appreciation ,thus adding that additional  amount to the discrepancy in 1 MDB and Kanda's clarification, bringing the sum unexplained to RM 2.6 billion.

The figure  of RM 5.1 billion corresponds to what is disclosed in 1 MDB's financial statements for the year ended 31 March 2014 and it is  compared with the initial amount of   RM 4900 711 000 described above. Hence, the RM 5.1 billion figure most likely represents a capital appreciation of RM 200 million (no addition to investments was disclosed in the notes). Hence, not all of that RM 5.1 billion can be relied on to explain the utilization of that  RM 42 billion in borrowed money.
In fact , the story may be far  worse. The top line of their graphic shows that RM 6 billion in debt was "inherited". No evidence has been provided that this "inheritance" has been paid-off , and hence it is hard to see how  the  "inherited debt" can explain utilization of any part of  that RM 42 billion in borrowed money.

Added together , some RM 8.6 billion may not have been accounted for.

Extract from the 1 MDB 2014 Annual Report.
Goldman (GSI) delivered the money in a week and charged a bomb!

Monday, August 10, 2015

1 MDB's 2013 Annual Report Disclosures Of The USD 3 Billion Bond Issue Raise A USD 570 million question

by Ganesh Sahathevan

The UK fugitive from Malaysian law, now subject of an Interpol Red Flag in more than 100 countries,  Clare Rewcaslte-Brown, has suggested that the proceeds from the 1 MDB USD 3 billion bond issue may have been deposited and/or invested at Falcon Private Bank in Singapore,and that part of that sum might have found its way to the bank accounts of 1 MDB chairman, and prime minister of Malaysia, Dato Seri Najib Razak.
Najib Razak has claimed that the money in his bank account was a donation (from an unnamed source) , used for 1 MDB CSR purposes and other charitable works, even if his benefactor did not  describe his very generous gift as such.
All this has prompted this writer to relook 1 MDB's Annual Report for the year ended 31 March 2013,to determine how the proceeds from the bond issue have been reported. The numbers and notes raise a USD 570 million question,at least in this writer's mind. 
As disclosed in Note 33, Item (p) at pages 112& 116  the 2013 AR the  net proceeds from the 1 MDB International  USD 3 billion bond :issue in ringgit terms is  RM 8.434254 billion. The applicable exchange rate (also disclosed in the notes concerning accounting policies) is the the rate on the balance date ie 31 March 2013. An exact rate is not readily  available ,but a rate of 1 USD=RM 3.1017 is implied in the financial statements.

(Using that implied rate the net proceeds from the bond issue of RM RM 8.434254 billion equates to USD 2.71922203, which corresponds approximately  to claims made in the  Australian Financial Review, among others,  that the bonds were purchased en bloc by Goldman Sachs at a discount of of about 9-10% of face.

According to Note 43 on  page 148 of the 2013 AR,   RM 4900 711 000 is held as investment and RM 3 276 323 000 in cash " in  a financial institution with good credit standing" (this wording is repeated in the  note below, copied and pasted from the 2014 AR)

Note 27 confirms that that the sum of RM 4900 711 000 is part of  the net  proceeds of the 1 MDB Global Investments Ltd private debt security issue of USD 3 billion (see again,  note below, copied and pasted from the 2014 AR).

Note 38 at page 123 states that RM 5 045 955 000 is held at deposit with a licensed bank ,an increase of RM 4 773 477 000 from the previous year's balance of RM 272 478 000 from the previous year.Note 38 is an explanation of the item "Cash and Cash Equivalents"  from the Statement of Cash Flows at page 20 of the 2013 AR. Given that the proceeds from the  USD 3 billion bond :issue were received on 19 March 2013, and given that the notes to the financial statements in 2013 and then again in 2014 state that the proceeds were banked and invested " in  a financial institution with good credit standing" it is safe to assume that the bulk of that cash balance is from the proceeds of the bond issue.(The  RM 4900 711 000 is shown in the Statement of Cash Flow as a separate item, as an investment outflow).

Notes 27.43. and 38 ,read together with the Statement of Cash Flows, suggests that the subject matter is the same ie the net proceeds of the
 1 MDB International  USD 3 billion bond :issue,even if the  numbers do not always add up. For example, while the sum total raised is reported to be RM 8.434254 billion, the sum total disclosed in Note 43 is RM 8.177034000.

Then, if one reads Note 27 together with Note 38, the sum total cam range between RM  9.674188000 billion and RM 9.946666000.

Nevertheless, the sum RM 8.177034000 as disclosed in Note 43 is one that is disclosed in 1 MDB's audited financial statements,and it does suggest a shortfall of RM 257.22 milllion between what is reported to have been raised, and the sum of its components.
This then raises the question whether there is  further discrepancy between the reported bank balances, ie a difference of  RM 1769632000
between the RM  3276323000 reported in Note 43 and RM 5045955000 in Note 38.
Interestingly, that discrepancy stated in US Dollars  ,converted at a rate of RM 3.1012. is equal USD 570.63 million.

Goldman (GSI) delivered the money in a week and charged a bomb!

Saturday, August 8, 2015

Najib vs Datuk Harun Idris-40 years on which way will it swing.....New at RealPolitikAsia

by Ganesh Sahathevan
The prime minister and Umno president was reported as saying that he had taken the money on behalf of the party, and that it was not used for personal gain…/najib-says-macc-cleare…
But then see:
Public Prosecutor v Datuk Haji Harun bin Haji Idris (No 2) [1977] 1 MLJ 15 High Court, Kuala Lumpur (Raja Azlan Shah J).
Summary :

The accused was charged with three charges of corruption. It was alleged that the accused as Mentri Besar, Selangor: (a) solicited the sum of RM250,000 for UMNO as an inducement to obtain the approval of the Executive Council in respect of an application for a piece of state land; (b) being a member of a public body accepted for UMNO the sum of RM25,000 as an inducement to obtain such approval; (c) accepted for UMNO the sum of RM225,000 as an inducement to obtain such approval. It was also alleged that the accused was a member of a public body, namely, the government of Selangor, or alternatively, that he was an agent of the Ruler of the State of Selangor.
Holding :
Held: (1) the accused as Menteri Besar was a member of a public body, that is, the government of Selangor; (2) on the facts of this case, the accused did solicit for UMNO a gratification of RM250,000; (3) the circumstances in which the gratification was solicited gave rise to the inference that it was solicited corruptly; (4) the accused solicited the gratification as an inducement to obtain the approval of the Executive Council in respect of the application for the land; (5) the facts showed that the accused accepted a gratification from the Hongkong and Shanghai Bank of RM25,000 through Haji Ahmad Razali at the airport on or about 16 August 1972 and that he on or about 27 March 1973 accepted from the Hongkong and Shanghai Corp a gratification of RM225,000 in his office in Kuala Lumpur; (6) the accused accepted the gratification of RM25,000 and RM225,000 as an inducement to do an official act in connection with the bank's application for alienation of the land; (7) on the evidence, the prosecution had proved its case in relation to all three principal charges, which if unrebutted, would warrant the conviction of the accused; (8) the accused did not rebut the evidence for the prosecution and on all the evidence considered as a whole, the charges against the accused have been proved beyond reasonable doubt.
Digest :
Public Prosecutor v Datuk Haji Harun bin Haji Idris (No 2) [1977] 1 MLJ 15 High Court, Kuala Lumpur (Raja Azlan Shah J).

Thursday, August 6, 2015

On the matter of the US$ 681 million donation to Prime Minister Najib Razak: Sender did not describe payment as a donation

by Ganesh Sahathevan
The Malaysian Prime Minister Najib Razak has said that  someone has sent him a donation of US$ 681 million, via Wells Fargo Bank of New York, using a BVI company (since liquidated) called Tanore Finance. That company was a client of Falcon Private Bank Of Singapore, which was the ordering institution for that wire transfer.

The Wall Street Journal which broke the story of that massive "donation" has placed on-line the relevant documents.

Readers are referred to pages 2 and 3 of the documents,and to the items marked 70-Remittance Information.
Curiously the transfers  (the sum total was paid in two amounts)  are  described as  "Payment" and not " Donation".
This is not a matter of mere semantics.In these days of heightened controls on the transfer of funds, given the fear of terrorist financing, descriptions are important , even for very small sums. In this case where that large amount of money was being transferred to an individual the description becomes even more important.

Readers may also be interested in item 71A Details o Charges
 "SHA" means charges are shared and it is again curious that such a generous donor would want the recipient to share in the charges for the transfer.
A PDF copy of the documents may be sighted at :


Tuesday, August 4, 2015

Clare Brown's extradition will require providing UK ALL details on the 1 MDB issue;and at the highest levels :Her Majesty's Secret Services likely to be involved

Malaysia is a Category 2 state under the UK's Extradition Act and hence an extradition request must be made to the Secretary of State, and not the UK police. The involvement of the UK's intelligence services into the whole issue is guaranteed given that  it is the Secretary of State who must decide if the request is valid . He is also in charge of the intelligence services (including Brian Lord's former employer the  GCHQ)
and given the issues and persons involved   ,it is more likely than not that input from  the intelligence services will be required.
The process involves the following:

Extradition from UK: process under Part 2 of the  Extradition Act 2003 (UK)

Part of 2 of the act covers category 2 territories, which include Malaysia.
Requests from these states need decisions by both the Secretary of State and the courts. The Secretary of State has no influence over the time it takes for a case to clear the judicial stages, and time a case takes to complete can vary depending on how complex the case is.
The extradition process to these territories follows these steps:
  1. an extradition request is made to the Secretary of State
  2. the Secretary of State issues a certificate and sends request to court (if request is valid)
  3. preliminary hearing
  4. extradition hearing
  5. Secretary of State decides on extradition 
After the extradition hearing and the Secretary of State’s decision a requested person may be able to appeal to the High Court, and if that is unsuccessful, to the Supreme Court.

Extradition requests: what’s required

When an extradition request is made to the Secretary of State if it’s ‘valid’, the Secretary of State will issue a certificate and send the request to the court.
The request will be valid if it is for a person accused or convicted of an offence, and if it’s made by an appropriate authority, such as a diplomatic or consular representative.

Documents needed to make a request

Generally the information accompanying a request needs to include:
  • details of the person
  • details of the offence of which they are accused or convicted
  • if the person is accused of an offence - a warrant for their arrest or provisional arrest (or a duly authenticated copy)
  • if someone is unlawfully at large after conviction of an offence – a certificate of the conviction and sentence (or a duly authenticated copy), or for provisional arrest, details of the conviction
  • evidence or information that justifies the issue of a warrant for arrest in the UK, within the jurisdiction of a judge of the court that would hold the extradition hearing
If the court is satisfied that enough information has been supplied, an arrest warrant can be issued.
Requesting states are advised to submit an initial draft request to the Crown Prosecution Service (CPS), so that any potential problems can be resolved.


Team Jho Low Is Now A Liability -Will It Be C4ed?

by Ganesh Sahathevan

The blogger Raja Petra Kamaruddin recently wrote that the  dismissals in Malaysia of among others the Attorney-General Ghani Patail were all part of moves  by Prime Minister Najib Razak to counter criticism of his involvement in the 1 MDB issue. As Petra put it:

And that was when they (Najib's detractors) started playing up the issue of 1MDB, and after that the issue of the RM2.6 billion of 1MDB’s money that Najib allegedly transferred to his personal bank account and which has since disappeared.

In the weeks before the dismissals (and some arrests ) a number of persons were remanded by Malaysian Police to assist with investigations into the issue of that RM2.6 billion of 1MDB’s money that Najib allegedly transferred to his personal bank account and which has since disappeared. 

These persons remain at large ,and the relevant authorities said that they could not be located. Be that as it may, their involvement in the alleged transfer of funds  remains an outstanding matter, and the very fact of their continued existence means that there remain persons who may have knowledge of the issues Najib wants put to rest. That they be permanently silenced is only logical.
Team Jho Low must know that it can and should be C4ed, a Malaysian euphemism for being executed.

                                                          TEAM JHO LOW

 Jho Low

Casey Tang & Jasmine Loo 
Bank Negara Malaysia’s ‘Wanted’ poster of the two persons whom the bank believed could assist in their investigation. — Picture by Bank Negara Malaysia

Lee Lin Sit

Tiffany Heah