Thursday, May 18, 2017

Rosmah Mansor's role in 1MDB theft emerging : Riza Aziz's lawyers make statements that point finger at Mummy

by Ganesh Sahathevan

In his statement challenging the US Department Of Justice's seizure of assets in his name,Riza Aziz, son of Rosmah Mansor and step-son of PM Najib says via his lawyers: 

Mr Aziz claimed ownership of the entities in his 2012 US tax return, and properly disclosed the transfer of funds ( $94,500,000.00 )from Aabar-BVI to Red Granite Capital Limited. Those funds, according to the Complaint, were reported as a gift under US tax law, and Mr Aziz, after discussion among his accountants and business manager, obtained a letter documenting the gift, signed by the CEO of Aabar (Mohamad Al- Husseiny).

“Nothing in the Complaint alleges that Mr Aziz …. knew that Aabar-BVI was unaffiliated with Aabar or IPIC”

Accepting the above statements, it follows that Riza Aziz honestly believed that he was being gifted some USD 95 million by , ultimately, the Abu Dhabi government  , based on a personal relationship. 
Al- Husseiny's letter that Riza relies on states:

This letter is intended to confirm that the transfer of $94,500,000.00 which consisted of a wire transfer on June 18, 2012 to BSI Bank, Ltd. (account number [XXX]250A) for the benefit of Riza Aziz was intended as a gift. The transfer was made for no consideration and no services were performed or gift received for assets. This was a gratuitous transfer made with detached and disinterested generosity based on our close personal relationship.

The DOJ argues that Riza must have known that the transfer had nothing to do with the IPIC and the government of Abu Dhabi, but Riza insists otherwise.
Taking him at his word, and given that the basis of that "gift" was a "personal relationship", an alternative and one suspects unintended picture emerges; that the  "gift" was granted if not instigated by Riza's mother,Rosmah Mansor, who we have been told time and time again has close personal friendships in the Middle East.These are some of what has been reported in Malaysia:

Rosmah uses Saudi prince’s RM7mil present for charity
Rosmah seeks assistance of Egyptian president’s wife to free M’sian student

Our students safely home thanks to FLOM

At this point is it important, indeed vital , to remember that Riza claims he received close to a hundred million as a gift from IPIC, a sovereign wealth fund(SWF).This is unlike the claim made by his step-father, PM Najib, who claims a "donation" of USD 681 million was given him by the Saudi King or some close relative, in a personal capacity. SWFs are not normally in the habit of making multi-million dollar gifts to private individuals out of love and affection, and in the case of IPIC, reporting obligations to the LSE would have made such generosity very highly unlikely.
Be that as it may, accepting him at his word, it becomes clear that if the government of Abu Dhabi had a personal relationship, it was with Rosmah rather than  Riza. 

Consequently, it follows that if a gift was in fact granted by that government, it would have been to her, or at her instigation.
However, at or around the time of this gift making, the Malaysian Government via 1MDB was making payments to Aabar and IPIC, of some USD 1 billion.As the Opposition MP Tony Pua explains it, these transactions resulted in significant losses to 1MDB.

Therefore, even if that  USD 94.5 million was a gift from Aabar, it was extended during a time when Aabar and IPIC  received over a billion from the Malaysian Government.
If a "personal relationship" was the basis of that gift,then it is more likely than not that  Rosmah's "gift" was actually  a bribe for what was clearly a very profitable series of transactions in IPIC's favour,  This is  the conclusion one would reach based on Riza Aziz's own statement of claim.

1MDB bears the ultimate cost of that bribe, and in that sense it is not different from theft.


How 1MDB's Money Went Missing Through The Aabar Power Purchase Deals

How 1MDB's Money Went 

Missing Through The 

Aabar Power Purchase Deals

Tony Pua MP
Tony Pua MP
While the man responsible for 1MDB’s investment decisions hangs out in New York, DAP’s Tony Pua has queried the emergence of some astonishing figures.
Out of the US$3.5 billion raised by the fund through its so-called power purchase bonds, he says it can now be seen that  1MDB walked away with with a deficit of US$649 million!
The bonds were raised through a co-guarantee by Abu Dhabi’s Aabar subsidiary of the IPIC sovereign wealth fund, which Pua and others have pointed out was totally unnecessary and has turned out to be ruinously costly.
As Pua point out:
“This means that the wholly-owned Ministry of Finance subsidiary ended up with less cash than it had after it took the loan!”
Pua bases his calculations on information that has now become available about what were highly secretive deals to raise money for the ‘development’ fund, which it has now been confirmed is run entirely under the personal management of the Prime Minister.
The power purchase bonds of 2012 were the second of three major money raising ventures by 1MDB, which all ended up losing money rather than driving investments as promised.
PetroSaudi drill boat, but what did 1MDB get from the deal?
PetroSaudi drill boat, but what did 1MDB get from the deal?
The first had been the joint venture with PetroSaudi, into which 1MDB poured some US$1.9 billion, all of which it can now be demonstrated was siphoned away from the public fund.
The Prime Minister cum Finance Minister has nevertheless persisted in maintaining that 1MDB sold out its ‘interest’ in the PetroSaudi venture for a handsome profit to a third party (who has mysteriously remained anonymous) and that the proceeds (alleged to be US$2.3 billion) were stashed in a shadowy and anonymous Cayman Islands fund.
But these claims have proved hollow.
After 1MDB announced under pressure that it had ‘moved the cash’ from the Caymans to an account at BSI bank in Singapore, Sarawak Report published a statement by Singapore regulators that there was in fact no actual money in the account, merely undetermined paper assets.
1MDB have been forced to acknowledge the statement was true.
Indeed, it is perfectly clear from the records obtained by Sarawak Report from PetroSaudi that all the money had long since gone to Jho Low’s company Good Star, the buy out of UBG bank and also to pay off PetroSaudi.

Power purchase “loan sharks”

The money involved in the two separate power purchase deals is an even more staggering amount – two bonds of US$1.75 billion raised a total of US$3.5 billion, allegedly to invest in buying up power stations.
However, Pua has now analysed the records to reveal that so much of the money raised was allegedly spent on payments that by the end of the process 1MDB in fact ended up owing more than the US$3.5 billion raised in the first place.
First, he says 1MDB paid a staggering US$300 million to Goldman Sachs as “certain commissions, fees and expenses” for arranging the bonds.
Second, 1MDB allegedly placed US$1.4 billion as collateral with the Aabar parent fund IPIC (Abu Dhabi’s sovereign wealth fund), however this money was never registered as having been received by IPIC, who have now queried Najib about where it is.
Third certain ‘options’ had been granted to Aabar as part of the guarantee deal, which 1MDB then set about terminating at enormous expense. The accounting records show, says Pua, that 1MDB first paid US$993 million (supposedly sourced from the money supposed to be in the Cayman island account).
Then 1MDB paid another US$975 million borrowed from a Deutsche Bank led consortium towards the same end.
To top it all, the MP points out, 1MDB still owes IPIC US$481 million as at 31 Dec 2014.
This adds up to a deficit on the money borrowed of US$649 million.
No wonder, observes Pua, that the beleaguered fund is now struggling under mammoth debts, if it engaged in such “loan shark” borrowing:
“Why would 1MDB borrow so much money, causing RM15.4 billion of indebtedness based on today’s exchange rates, when 1MDB effectively doesn’t get to use any of the funds raised?”
Pua makes plain that he divines the answer to his own question:
“Anyone who can count will be able to see that there are some serious criminal shenanigans which took place with the above bond arrangement.”
he posits and he adds that in his view the recorded option repayments of US$993 million and US$975 million were no more than
“a fraudulent round-tripping exercise”
Of course, the third major example of a massive 1MDB bond deal from which money ‘leaked’ was the 2013 ‘strategic partnership’ plan, again with Aabar, for which Najib Razak hastily raised another US$3 billion just before the last election.
The money was billed as being raised for the Tun Razak Exchange, but by the end of year accounts it was registered that a whopping US$1.4 billion of that had already been spent on unspecified ‘working capital and debt repayments’.
Shortly afterwards, Sarawak Report has pointed out, the mystery US$681 million popped into Najib’s personal account in order, he has admitted, to fund additional (and illegal) election ‘expenses’.
Najib Razak may prefer to jet around on the world stage in his personal jumbo than to provide explanations for these astonishing figures.
In fact, he has appeared to favour political solutions to his economic problems, involving locking up critics on unspecified grounds of ‘sabotage’ as opposed to providing answers, which makes Mr Pua a brave politician, even if he is protected by solid and recorded factual evidence.
See his press release below:
Media Statement by Tony Pua, DAP National Publicity Secretary and Member of Parliament for Petaling Jaya Utara in Kuala Lumpur on Monday28 September 2015:
Dato’ Seri Najib Razak must answer if he had authorized the outrageous “loan shark” guarantee arrangement with International Petroleum Investment Corporation (IPIC) for 1MDB’s US$3.5 billion of bonds in 2012
Last week, the Wall Street Journal (WSJ) shed light on US$993 million which was allegedly paid to International Petroleum Investment Corporation (IPIC) by 1MDB to buy back the latter’s options have not been properly accounted for.  The above payment was not reflected in the audited accounts of IPIC.  Instead, IPIC’s books showed that 1MDB still owes an additional US$481 million to the former for the termination of the options as at December 2014.
These options were granted to IPIC’s subsidiary, Aabar Investment PJS in 2012 to acquire up to 49% of its two energy subsidiaries, Powertek Investment Holdings and 1MDB Energy (Langat) Sdn Bhd as part of the condition for the provision of a guarantee by IPIC for US$3.5 billion of 1MDB bonds.
The above exposé brought to surface a puzzling situation where:
  1. 1MDB borrowed US$3.5 billion guaranteed by IPIC.
  1. 1MDB paid approximately US$300 million to Goldman Sachs as “certain commissions, fees and expenses” for arranging the above bonds.[1] [2]
  1. 1MDB placed US$1.4 billion “refundable deposit” as collateral with IPIC.[3]
  1. 1MDB terminated the options granted to IPIC or its subsidiary, Aabar Investment and paid as compensation:
a. US$993 million sourced from the November 2014 US$1.22 billion redemption from 1MDB’s Cayman Island investment.[4]
b. US$975 million borrowed from a Deutsche Bank led consortium[5] [6]
c. 1MDB still owe IPIC US$481 million as at 31 Dec 2014[7]
Based on the above known facts, after deducting (1) US$3.5 billion with (2), (3) and (4), 1MDB actually ended up with a deficit of US$649 million!  This means that the wholly-owned Ministry of Finance subsidiary ended up with less cash than it had after it took the loan!
How absolutely bizarre can you get?  Why would 1MDB borrow so much money, causing RM15.4 billion of indebtedness based on today’s exchange rates, when 1MDB effectively doesn’t get to use any of the funds raised?
Even in the event that 4(a) and 4(b) was a fraudulent round-tripping exercise as I had questioned in my statement last week, removing the US$975 million Deutsche Bank loan from the equation does not make the situation much prettier.
It would only mean that although 1MDB borrowed US$3.5 billion, it had effectively access to only US$326 million or less than 10% of the funds raised.  Anyone who can count will be able to see that there are some serious criminal shenanigans which took place with the above bond arrangement.
The question now is whether the Prime Minister, who is also the Finance Minister, Dato’ Seri Najib Razak gave his written approval for the above outrageous loan transaction, as required under 1MDB’s Memorandum and Articles of Association (M&A).  Clause 117 of the M&A dictates that the Prime Minister must give his “written approval” for any of 1MDB’s deals, including the firm’s investments or any bid for restructuring.
This includes “any financial commitment (including investment), restructuring or any other matter which is likely to affect the guarantee given by the Federal Government of Malaysia for the benefit of the company, national interest, national security or any policy of the Federal Government of Malaysia”.
If Dato’ Seri Najib Razak did not provide the written approval for the above bond issuance, then the Board of Directors of 1MDB must be taken to task for breaching the mandate given to them.  
However, if the Prime Minister has granted his written approval, he must immediately explain to the nation why he agreed to such unbelievably stupid and dumbfounding terms of the US$3.5 billion bond issues which have contributed in substantially to the financial crisis in 1MDB today.
Tony Pua

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