Australia's Department of Defence has also indicated that the highly stealthy Collins class submarines
and P3-Orions (these days kept at home in Darwin) will be used in the exercise.This sounds more like an act of desperation by a department trying to show that it is doing something.
Australia set to gather intelligence on military drills between China and Russia
Australia is likely to have military assets in the South China Sea to gather vital intelligence on a joint drill between Chinese and Russian forces next month, Fairfax Media understands.
The exercise between Chinese and Russian ships and planes is intended to send a signal of defiance to the West but defence sources and experts say it will also provide a gold mine of intelligence on how the major powers' militaries work together.
A Defence source told Fairfax Media that assets were expected to be used to collect information, though the source declined to say what kind.
"It would be foolish for Defence to miss an opportunity like this," the source said.
Surface warships could also observe from over the horizon though this is less likely because they are committed elsewhere. This overt observation is more likely to be undertaken by the US Navy, Fairfax Media has been told.The deployment of a Collins Class submarine would be one option. The simplest way to observe the drills would be with the RAAF's P-3 Orion surveillance planes, which routinely fly over the South China Sea as part of Operation Gateway.
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The Australian Defence Force has in the past adjusted the timing of Operation Gateway patrols to match events of particular interest.
Defence has previously said it varies the path of such patrols depending on what is worth observing, including whether to devote more effort for example to the South China Sea rather than the Indian Ocean.
Chinese President Xi Jinping and Russian President Vladimir Putin at a meeting in June. Photo: AP
Peter Jennings, executive director of the Australian Strategic Policy Institute, said it would be "routine business for Australia to want to observe such an exercise with its P-3 maritime surveillance aircraft".
"I imagine there would be a great deal of interest from us and the Americans in how effectively the Chinese and Russians are able to operate together," he said.
The RAAF's P-3 Orion surveillance planes routinely fly over the South China Sea.
Mr Jennings, a former senior Defence Department official, said the joint exercise was "more about political show than genuine military co-operation".
"Increasingly [Russian President Vladimir] Putin and [Chinese President] Xi [Jinping] identify each other as like-minded countries that are prepared to push against the established international system," he said. "It's a marriage of strategic convenience which is designed to create maximum discomfort for the US and its allies."
Retired Royal Australian Navy rear admiral James Goldrick said it would "certainly be worthwhile" to observe the drills. Planes or ships would not need to get too close, but rather could observe from over the horizon and pick up signals and radar signatures.
"It wouldn't be a matter of having to fly 500 metres overhead," he said.
Mr Goldrick said even if they weren't natural allies in the long term, China's and Russia's interests currently were aligned around opposing "the world order that they see effectively as having been set up by the US".
Mr Putin had calculated that China rather than the US was a preferable relationship to "restore Russia to where it thinks it ought to be", he said.
by Ganesh Sahathevan It has been previously reported that Malaysia's PM Najib recently spent a week in Russia.There remains no official word on that trip, despite the evidence.
TASS reported in May that state owned JSC Zarubezhneft was in talks to acquire Petronas's assets. Is is believed that Najib's week long trip to Moscow was with regards that deal, or something similar involving Petronas assets. However, it has just been reported by the investigative Sarawak Report website that Najib has already done a deal with the Chinese Government which involves an overpriced high speed rail contract. The Malaysian Government's contribution can only come out of Petronas, and it is likely that the Chinese have been given undertakings based on the same Petronas assets that are being offered Russia. As the Chinese say, One mountain cannot contain two tigers.” END
OUTRAGE! - Najib's Secret Deal With China To Pay Off 1MDB (And Jho Low's) Debts! - SHOCK EXCLUSIVE
Marked “For Internal Use Only” an Appendix to a Term Sheet due to be approved by the Malaysian Cabinet tomorrow (27th July) lays out in detailed figures how Najib plans for over US$7 billion in accumulated 1MDB/Jho Low company debts to be wiped out by taxpayers in a secret deal between his Ministry of Finance and the Chinese state company CCCC (China Communications Construction Company).
The PM’s ‘cunning plan’ is to get the Malaysian Government to agree to inflate the actual cost of the East Coast Rail Project from only RM30 billion to RM60 billion, all to be borrowed from the Chinese Government, in order to disguise the payment of 1MDB’s (and Jho Low’s) company debts!
Sarawak Report can reveal the secret figures behind the deal, which has been inflated 100% to hide the payments for 1MDB!
A whistleblower, who has supplied full details of the project, described the plan to Sarawak Report:
“The Malaysian Government is planning to award an overvalued project to launder money in order to fill the loophole of 1MDB. The plan is to award the East Coast Rail Project to a Chinese Company, China Communication Construction Company Limited (CCCC). The initial budget for the project is MYR 30b, but they have overvalued the project for another MYR 30b, making it MYR 60b. The extra MYR 30b will be use to launder out cash to 1MDB related companies. The project has been proposed to the cabinet on 25/7/2016 and will be approved by the cabinet on 27/7/2016 with total value of MYR 60b. The Chinese company, which is backed by the China Government, will help pay off the 1MDB dept in advance and progressively. In return, this Chinese company will be rewarded with high profits and land, and of course extra influence with the Malaysian government”.
Doubling the cost of mega-project
The outrageous plan is blatantly laid out in the term sheet and internal report, which have been leaked to Sarawak Report.
The report says baldly that the actual cost of building the railway, has only been estimated by CCCC at RM27 billion. However, there is to be a so-called “Additional Differential” cost of RM29.85 billion, which will more than double the cost to make a total bill of RM60 billion, including a fat percentage of profit for the company (handily based on the total and not just the construction costs):
Najib plans to double the cost of the Railway to RM60 billion to hide his 1MDB missing money
The company makes no bones about the incentives provided by the Malaysian Government in this “Direct Contract”, meaning that there was no open tender to get the best deal for the project.
CCCC says it has been given land on generous terms, including a chunk of land which was given cheap by Najib to 1MDB, then inflated in value at Ayer Item – the land which is valued at US$1.3 billion will be offered to CCCC for US$850 million.
CCCC will also gets tax breaks including from GST for the next ten years. And then, as a Chinese State-owned company CCCC notes the benefit of the extended influence over Malaysia the project and the massive loan of the cash (at a generous 2% interest rate) will provide.
So much for Najib Razak’s much vaunted ‘inward investment’ plans from fellow Islamic countries and his stirring of hatred against the so-called ‘Chinese Tsunami’!
What is in this deceitful deal for the Chinese? Just take a look!
Sneaking 1MDB’s debts into the project
The quid pro quo for the Chinese partners in this lucrative deal is to assist in Najib’s corrupted exit strategy for getting shot of his multi-billion dollar debts at 1MDB at a total cost of US$5.63 billion!
The first priority being to get 1MDB off the hook over its outstanding payments to Abu Dhabi’s IPIC. In the first instance this will be achieved through the payment of the $850 million to 1MDB for the Ayer Item land, but after that the company will assume the repayment of the remaining debts for the disastrous ‘power purchase’ and ‘strategic partnership loans’ which lost billions (mainly stolen).
The Malaysian taxpayer will of course have to pay the whole lot back with interest over the next 7 years in payments, all planned to be disguised by the inflated Rail Project!
Sneaking a write off of 1MDB’s debts in an up-front payment
Laughably, this outlay is set to be disguised by a repayment in ‘assets’ valued to the same amount of US$5.63 billion. The assets concerned are largely duds – vaunted ‘liquid and cash assets’ tucked away by 1MDB in dodgy bank accounts, including the 1MDB Brazen Sky account at BSI (alleged worth $940 milllion) and also the supposed assets of 1MDB Global at BSI, (alleged worth US$1.56 billion).
Significantly, we note that the 1MDB Global money, which was raised through a Goldman Sachs loan, is now also described as ‘Units’, raising the probability that these are in fact worthless pieces of paper representing bogus investments, similar to the ‘Units’ in Brazen Sky, which would imply, that like the PetroSaudi funds, the billions raised by 1MDB Global have all been stolen:
Worthless ‘units’ from Brazen Sky and 1MDB Global are being dumped into the deal as if they had been ‘bought’, whereas in fact all costs are being separately covered by the ‘additional items’ on the inflated projected
List of Payments totals US$7.5 billion/ RM29.8 billion
Just last week the United States DOJ explained in searing detail how all that missing 1MDB money, which is now being sneaked onto the East Coast Rail tab, was stolen by Najib and his family and associates, including Jho Low and IPIC’s Khadem Al Qubaisi, to be spent on gambling, drinking, jets, yachts, record-breaking fine art purchases (in many cases depicting under-dressed female forms).
The report sheet in our possession lays out in precise detail what CCCC/The Chinese Government has agreed to funnel through the project, in order to get Najib off the hook on all his problems.
The astonishing list contained in an Appendix to the agreement is clearly costed and totals over US$7,5 billion. It includes writing off 1MDB’s debts to the Abu Dhabi sovereign wealth fund IPIC, which is currently suing 1MDB to the tune of US$6.5 billion over unpaid guarantees.
RM30 billion ‘Added Differential’ ie bail out for 1MDB and Jho Low
Bailing out Jho Low’s companies also!!
Significantly, the list also includes an agreement to buy out two Jho Low related companies, which have long been suspiciously associated with Najib’s record of personal plunder from 1MDB. These are Loh & Loh Corporation Berhad and Putrajaya Perdana Berhad, for which Jho Low and his partners will receive a healthy US$315 million:
Jho Low related companies which funnelled money to Najib are also in the secret bail out package!
Sarawak Report has long since exposed how Jho Low used 1MDB money, which was secretly channeled through a so-called Islamic loan agreement with the company PetroSaudi to ‘buy out’ the Sarawak UBG group in which he and Taib Mahmud held the major stakes.
The purported buyer was Javace Sdn Bhd, a supposed subsidiary of PetroSaudi International, Seychelles (a bogus subsidiary of PetroSaudi, whose Director was Tarek Obaid, also a director of PetroSaudi). However, secret transactions obtained by Sarawak Report showed that all the money in Javace was controlled by a company Panama Investment Manager, which was owned by Jho Low.
The two subsidiaries of UBG Putrajaya Perdana and Loh & Loh are still identified as crony companies controlled by Low and Putrajaya Perdana was identified by investigators as having played a key role in funnelling cash from 1MDB’s subsidiary SRC into Najib’s own personal accounts:
The diagram held up by Attorney General Apandi showing Putrajaya Perdana’s role in passing public money to Najib
Plainly therefore, Najib hopes to use his over-reaching powers at the MOF/PM’s office to launder all his dirty linen through the same simple mega-project, courtesy of secret and politically motivated Chinese cooperation.
Public estimate leaves out the 1MDB costs and commitments?
A huge sum of RM85 million is also put aside in the contract for a ‘nominated company’ to be awarded a “publicity” and “communications” and “strategic consultation” role on the project – no guesses that this will go to a crony outfit.
Finally, also attached to the papers is a totally conflicting set of calculations, which are not listed as being “only for internal consumption” and which appear to represent the public face of the planned deal. These consist of a broad-brush, ‘back of the envelope’ set of figures, which provide a broad estimate for the project at the fuller figure of RM60 billion.
In this list there is no mention of any of the costs due to be carried for 1MDB!
Public figures? How the same project is being costed at RM60 billion, but with no mention of 1MDB
The agreement is due to be passed by Najib’s compliant cabinet….. about now!
While Julie "Kissinger" Bishop is still contemplating-g how best to utilize her UN Resolution on MH 17, Malaysia's PM Najib marks the second anniversary of that accident in Moscow.
His official plane, using the NR 1 call sign has been tracked PlaneFinder over this past week in Moscow, and is believed to be now en-route Kazakhstan.
In Crouching (Turn)Bull, Hidden Rabbit Parts 1 & 2 the matter of the exact nature of the Turnbull family's business was discussed in the context of the family's ties to China. It was explained then that the family's hedge fund business in Singapore, Keshik Capital, led by son Alex Turnbull, is not likely to have access to funding in Asia, expect where investors could see some advantage of establishing financial ties with the prime minister of Australia. As of last night, Malcolm Turnbull's tenure as prime minister of Australia is in doubt, and his remaining days in power are likely to be so volatile that he cannot be relied on as an asset. Subsequently, Keshik Capital is likely to find its sources of funding withdrawn,and is very likely to close shop. In addition, the family and Turnbull himself are likely to find that there has never been a worse time to be a pseudo millionaire. While Turnbull boasts a multi-million dollar portfolio, few of these generate cash in significant amounts, and many are likely to have suffered first from the 2008 GFC, and more recently from the Brexit fallout. Turnbull is not likely to find another Ozemail, or Goldman Sachs,and after last night, it is doubtful if anyone would want to do invest in him or his family. END Reference
Friday, April 29, 2016
Crouching (Turn)Bull, Hidden Rabbit Part 4: The DCNS Affair-Japanese "suspect Turnbull’s... business connections to China served France
by Ganesh Sahathevan
\As readers of this blog would be aware, the Thurbull's may well have an on-going, current , business connection with China.
In Part 3, US Government suspicions about Turnbull given his China connections were published,
And now, from The Australian , 30 April 2016,excerpts which show that Japan ,having just lost the AUD 50 billion submarine contract to France's corruption prone DCNS , is also wondering about the Turnbull's China connections, even if The Australian thinks these were in the past:
“They suspect China has been pulling the strings and Turnbull kowtowed to China. They also suspect Turnbull’s (past) business connections to China served France.
“There is speculation in Japan that this decision was taken by the Turnbull government based on its assessment of Australia’s relations with China. This sends a message that Australia will not be too close to Japan and possibly not even too close to the United States, especially in the South China Sea. If that’s true it also has an impact.”
Yoshiji Nogami, a former vice minister for foreign affairs and now president of the Japan Institute for International Affairs, responded with world weary sarcasm.
“So the submarines in operation lost to the submarines on paper,” he said, in reference to the fact that the French submarine does not yet exist but is merely a design concept.
“It’s just a coincidence but it’s very bad timing. The decision was announced only a couple of weeks after the Prime Minister (Turnbull) visited Beijing and Beijing has been interfering in Australian domestic politics.”
Japan sees Chinese hand in decision to overlook Soryu
Australia’s standing in Japan, our most important geo-strategic partner in Asia, is deeply diminished as a result of the decision to reject its offer to build 12 new submarines for us.
On Monday the Turnbull government notified Tokyo, and on Tuesday it announced the successful bidder was the French firm DCNS.
Japanese opinion of us, elite as well as public opinion, is bruised, tender and bitter as a result.
Many Japanese believe Malcolm Turnbull kowtowed to the Chinese, folding under their unsubtle pressure. The Japanese also believe they were collateral damage in Turnbull’s intense hostility to Japan’s friend, Tony Abbott. These views may be completely unjustified but they are widespread.
Some influential Japanese are even starting to publicly question Australia’s reliability as a strategic partner. There is a sense of Australia not being altogether a serious country.
That important Japanese are saying these things in public ought to give Canberra the most serious pause for reflection.
Japanese Prime Minister Shinzo Abe and his government only ever got involved in our submarines because an Australian prime minister, Tony Abbott, asked them to do so.
But then the terms of their engagement kept changing. Australia’s requirements kept changing, as did the identity of our political leadership — the Japanese dealt with three different defence ministers and two different prime ministers over the course of this unhappy saga. Still, all the way along, they were given every reason to think they were still the preferred supplier.
Then their humiliating rejection was leaked in the media before they were told anything about it.
Official Japanese reaction was measured but did not try to conceal Tokyo’s shock and hostility at the outcome.
“The decision was deeply regrettable,” said Japan’s Defence Minister, Gen Nakatani, who demanded a full explanation from Canberra.
On the day of the announcement, I interviewed Seiji Kihara, the State Minister for Foreign Affairs, who confirmed that even at the highest levels Japan had expected, right up until the devastating leak against it, that it would be successful.
Kihara’s comments to me reflect the sober caution of a professional foreign ministry.
“Because the submarine was the symbol of Japan-Australia defence co-operation, and Japan brought both the civilian and government (sectors) together on the project, it is very disappointing that we were not chosen,” he said.
“We accept the decision with humility and sincerity, and quite separately we wish to develop further security co-operation between Japan and Australia.”
You don’t have to travel far beyond the most elevated reaches of official Japanese politeness, however, to get a much starker and more alarming assessment.
Yoichi Funabashi is by a long distance the most influential foreign affairs commentator in modern Japan. Now head of a prestigious think tank, he is a former newspaper editor, a widely read columnist and author of countless internationally acclaimed books on Asian politics, geo-strategic issues, regional co-operation and the US alliance system. He is no hawk, being associated with the centre left of politics, and he knows Australia intimately.
So his words are doubly telling.
“The initial reaction to the deal from the Japanese government and on the part of the defence community has been very much negative,” he says.
“They suspect China has been pulling the strings and Turnbull kowtowed to China. They also suspect Turnbull’s (past) business connections to China served France. All these conspiracy theories are running wild.
“The Abe administration, and the Japanese government generally, were very uncomfortable with the previous Labor government in Canberra. They were very happy to have their soulmate, Tony Abbott, a man they saw as similar to John Howard, replace Labor. Then they were sorry to see Abbott replaced by Turnbull. But they never expected that the higher level promise to Abe from Abbott would be so shabbily trashed.”
Funabashi sees wider strategic implications from the debacle, and they are not good implications for Australia.
“It has been a rude awakening for Abe to see how shallow that US-Japan-Australia facade is — that semi-alliance, just how easily shattered that was.”
Funabashi believes strategic hard heads in Washington will also draw negative lessons about Australia from this episode.
“The US also is naturally very disappointed in this decision,” he says. “They have not hidden their desire to have Australia choose the Soryu (Japanese) submarine. So they too will take a more sober view of trilateral strategic co-operation.”
It is worth pausing here to note Funabashi’s statement of the obvious: that while remaining formally neutral in public, and respecting Australia’s sovereignty, and understanding that ultimately Canberra would choose the best submarine capability available (if one was clearly much better than the others), the Americans nonetheless enthusiastically backed the Japanese and wanted them to win.
Everyone seriously associated with this issue internationally knows this to be the case. That some government officials and one commercial bidder were able to hoodwink several credulous Australian commentators into claiming the Americans were not backing the Japanese is a depressing testament to the shallowness and provincialism of the Australian media and often the strategic debate. Very few commentators have independent foreign sources against whom they can test and verify the stories they are told locally, especially by government. This is a function of Australia’s isolation, and as a result the Australian view of reality in many policy sectors is deeply skewed and inaccurate.
Funabashi also fully acknowledges the weakness of the Japanese bid, its failure to understand how quickly Australian domestic politics was moving or to hire smart local lobbyists early in the process.
Some measure of Funabashi’s analysis is widely shared in Japan and across Asia.
The subs decision was front page news in the Asian editions of The Financial Times andThe Wall Street Journal. The Journal ran an editorial lamenting the opportunity lost for enhanced Australia-Japan strategic co-operation. The editorial’s cross heading was lethal for Australia’s reputation. It said: “Australia rejects a Japanese bid after Chinese pressure.”
The critical reaction is virtually universal among Japanese familiar with international relations.
In Kyoto I meet Hiroshi Nakanishi, an international relations scholar at Kyoto University. He offers the double barrelled Japanese response. The decision won’t destroy Australia-Japan co-operation, he says, but on the other hand: “When it comes to the concrete implementation of co-operation, it might have a long-term impact.”
And he makes this further judgment: “There is speculation in Japan that this decision was taken by the Turnbull government based on its assessment of Australia’s relations with China. This sends a message that Australia will not be too close to Japan and possibly not even too close to the United States, especially in the South China Sea. If that’s true it also has an impact.”
Yoshiji Nogami, a former vice minister for foreign affairs and now president of the Japan Institute for International Affairs, responded with world weary sarcasm.
“So the submarines in operation lost to the submarines on paper,” he said, in reference to the fact that the French submarine does not yet exist but is merely a design concept.
“It’s just a coincidence but it’s very bad timing. The decision was announced only a couple of weeks after the Prime Minister (Turnbull) visited Beijing and Beijing has been interfering in Australian domestic politics.”
Like most people I spoke to in Japan in a week of intensive conversations, Nogami believes, or at least says he believes, that Australia-Japan strategic co-operation will continue to grow because both parties want and need it, though Funabashi cautions there may need to be a cooling-off period.
The sense of disappointment and even betrayal runs across both sides of Japanese politics.
Akihisa Nagashima is a leading politician in the centre left opposition Democratic Party.
He is a former vice minister for defence and national security adviser.
I asked Nagashima if the submarine decision was a setback to vital strategic operation in Asia.
“Yes it is,” he said. “It wouldn’t have been just the submarine itself but all the training and co-operation that goes with it. It’s not just the physical asset; many, many other factors would deepen co-operation.”
However, in a perfectly polite Japanese fashion, Nagashima traces a series of events in Australian politics that affects, damagingly, the way Tokyo looks at Australia now.
“After Australia asked Japan for assistance in this matter, the decision is a result of joint efforts,” he says, “so I don’t want to blame one side.”
And here is the kicker.
“I wonder how the transition in Australian domestic politics affected the submarine deal, from Abbott to Turnbull.
“Recently Turnbull brought a thousand business people to visit Beijing. I just wonder what these actions reveal, and the case of the Chinese so-called private company getting the lease of the Port of Darwin from an Australian government. There was a series of events and the question is how the series of events affected the submarine deal. I don’t know, maybe it was a fair process, I believe.”
Across the board, the Japanese recognise the inadequacies and failings of their own actions. Mitsubishi and Kawasaki were too slow in making a full-blooded commercial commitment to the project. Because they thought they were dealing with a friend and ally, the Japanese weren’t cynical enough in their appreciation of Australian politics.
The Japanese have certainly learnt a lot of lessons from this. One of them, dolefully, may be not to put too much faith and trust in Australia, especially in strategic matters; not to take Australia altogether seriously as a strategic player, even in its own interests.
From Australia’s point of view, this has been one of the worst and most damaging episodes in the postwar relationship with Japan.
This was an episode of vast consequence and epic complexity.
You feel that a lot more information will come out about it in the future.
One story doing the rounds in Japan is that Barack Obama gave Turnbull a pass to choose the French at the very last moment. That would be consistent with the Americans supporting the Japanese all the way through but not going to the wire for them.
And the bigger regional consequences?
Beijing feels delightedly vindicated. It bullied Australia with crude public warnings against choosing the Japanese submarines, and from Beijing’s point of view that bullying worked a treat.
The lessons? Australia can be bullied effectively, and bullying is a good tactic.
Japan feels isolated once more and this isolation reinforces its security anxiety. This anxiety, many analysts believe, in the long run could tempt Japan to look once more at an independent nuclear option. If none of its allies is reliable, it may need to guarantee absolutely its own security, as Donald Trump has suggested.
Asia more widely sees Australia buckling to Chinese pressure. The US is reminded once more of the fickleness of allies.
These perceptions may be unfair but they are widespread.
Finally, if all that our leaders routinely say about the complex security environment we face is true, if their words on the need for us to engage Asia have any meaning, and if all the blather that everyone talks about relative American decline and potential strategic retrenchment in Asia is true, then one thing we need almost more than anything else is a close relationship with Japan.
This whole sorry, messed-up episode has set that back a long, long way. Don’t be fooled for a minute into thinking that doesn’t matter
As ASEAN has just discovered, China can use OBOR to force its own position.China's investment in Malaysia pursuant to OBOR (and brought on by the 1 MDB scandal) was obviously a lever that was used to disrupt the joint communique ASEAN had intended on the matter of China's intrusion into the South China Sea.
Dr Liu Jian Xing
Director
-International Cooperation Center, National Development & Reform Commission
Dr. Shuaihua Wallace
Managing Director
-International Center for Trade and Sustainable Development China
Paul Cooper
Chairman -Normal Disney and Young
Chairman -Gane Energy & Resources Pty Ltd (GEAR) and Gane Energy & Resources (China) Limited
Former Non-Executive Director -AXA Asia Pacific Holdings Ltd (AXA APH)
Prof. Wei An Li
President & Chancellor
-Tianjin University of Finance & Economics.
"I imagine there would be a great deal of interest from us and the Americans in how effectively the Chinese and Russians are able to operate together," he said.
