IPIC's "no predicate offence" agreement with 1MDB predicated on "fund units" Australia's ASIC could not find, in an investment fund since liquidated

by Ganesh Sahathevan




As previously reported:

Singapore's Straits Times reported this morning that Malaysia and Abu Dhabi had "reached a settlement on a dispute involving billions of dollars in debt obligations of scandal-scarred 1Malaysia Development Berhad (1MDB) that is at the centre of an international money-laundering probe."


The paper also reported:
A central piece of the proposed settlement calls for Malaysia to repay Abu Dhabi US$1.2 billion (S$1.7 billion) before the end of this year. The amount represents a loan and accumulated interest charges on a bailout financial package 1MDB received from Abu Dhabi’s International Petroleum Investment Company, or Ipic, in July 2015. 
The bulk of the payment on the outstanding loan amount will come from the sale of so-called “fund units” from Brazen Sky Ltd, a financial unit owned by 1MDB, to an undisclosed buyer, according to the financial executives. 


y no longer can be.
However, even if the units actually existed, the investment company to which the funds were supposed to have been placed with in the first place (ie the unit fund) no longer exists.Therefore, even if the units did actually exist, they no longer can be. In addition the fund manager too seems to have been liquidated.

Evidence for all this was provided in an earlier article on this blog, the Australian investment regulator, ASCI, found no evidence of the "units". 

NOV

5

Australia's ASIC finds no evidence of 1 MDB's Cayman units 

by Ganesh Sahathevan

Australian regulators have found no evidence that 1 MDB's US$ 2 billion " Cayman units" exist.

Investigators at the Australian Securities & Investment Commission (ASIC) ,which is in the process of liquidating the manager of the funds those  "units" are supposed to represent,   have only found amounts in the ten of millions under management, and nothing near the sum 1 MDB is supposed to have invested. 

That the Australian Securities & Investment Commission (ASIC) has obtained orders to liquidate Avestra, the company that is at least on paper the manager of 1 MDB's funds, has been previously reported on this blog.

It has also been reported that an affidavit in support of ASIC's liquidation and other actions against Avestra had  been sighted and the  that Bridge Global Absolute Return Fund, the fund under which 1 MDB's US$ 2 billion is supposed to be held,  is not listed among funds under Avestra's management.

ASIC has however uncovered a scheme which involved the swapping of fund units in an apparent attempt to hide the underlying assets, if not the funds themselves.

In the matter of 1 MDB the existence of any underlying assets is doubtful, as is the existence of the fund itself, at least at the relevant time.These issues have been described in the posting below.
END

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1 MDB lied when countering Mahathir's Cayman fund claims (UPDATE) 

UPDATE 
The following has been extracted from the 1 MDB website and has been posted under their heading  Facts in relation to blog posting entitled “More Investments by 1MDB” by Tun Dr. Mahathir Mohamad :

• In September 2012, 1MDB sold its shares in PetroSaudi Oil Services Limited for USD2.318 billion and received fund units in a Cayman registered fund. The Cayman registered fund is managed by Bridge Partners, a Hong Kong-based fund manager. These fund units were owned by 1MDB via its 100% subsidiary, Brazen Sky, and held through BSI Bank Singapore as custodian.

As has been reported ,the Cayman fund was only registered and licensed on 15 November 2013. 


by Ganesh Sahathevan

The Cayman Islands Monetary Authority's records show that the fund in which 1 MDB invested some USD 2 billion did not exist ,or was not registered , on the date the transaction is reported to have taken place.

1 MDB is reported to have invested USD 2,2 billion in Bridge Global Absolute Return Fund SPC segregated portfolio units in August 2012.

However, the Cayman Islands Monetary Authority's list of mutual funds shows that the only fund named " Bridge Global Absolute Return Fund SPC" was issued its license on 15 November 2013, more than a year AFTER 1 MDB is reported to have made its investment.

WIthout that license, Bridge Global Absolute Return Fund SPC would not have been able to accept funds for investment as an entity subject to the laws of the Caymans and it is doubtful if it would have otherwise existed. Even if it was in existence before that date, 1 MDB could not have dealt with it given its lack of standing. 

A convenient timeline of events is provided by The Star:

In 2012, the Islamic debt papers were redeemed and 1MDB ended up with a 49% stake in PetroSaudi Oil Services Ltd (PSOSL). The value of the 49% stake was US$2.2bil (RM6.8bil).

1MDB eventually sold the 49% stake to Bridge Partners Interna­tional Investment Ltd in August the same year, and received promissory notes amounting to US$2.32bil (RM7.18bil) from Bridge Partners.

In the same month, 1MDB through its subsidiary Brazen Sky Ltd invested the promissory notes into Bridge Global Absolute Return Fund SPC and Bridge Partners Investment Management Company (Cayman) Ltd.

1MDB redeemed part of the money amounting to US$1.22bil (RM4.03bil).
As previously reported on this blog, the purported manager of those funds, Avestra of Australia, is being liquidated by the regulator ,the Australian Securities and Investment Commission (ASIC) for breaches of the law. Howwer, ASIC has found no evidence of the existence of the Bridge Global Absolute Return Fund SPC or any of its segregated portfolios. The name does however appear in a number of Australian  Stock Exchange disclosures ,as reported here previously. 

It should be noted that the Cayman records show Bridge Global Absolute Return Fund SPC  to be "Registered" but not a "Master Fund". Given that Bridge Global is said to manage a number of segregated portfolios, one would expect the latter, but this is not the case.

END

Posted 5th November 2015 by Ganesh Sahathevan

  

Appandi's "Saudi donation" story was clearly intended as a "no predicate offence"defence,which the DOJ is still not buying

by Ganesh Sahathevan


Given the recent interest in "predicate offences" with regards the 1MDB matter,  this writer has decided to re-post the article below, which appears to have been an earlier attempt to use the "no predicate offence" defence to escape prosecution.

realpolitikasia

Thursday, February 16, 2017

Riza Aziz goes to court to challenge the DOJ-Riza relies on AG Appandi's findings, and challenges the DOJ to impugn Appandi's honour, integrity, professionalism ........

by Ganesh Sahathevan

(Source :John Berthelsen, Apandi Ali inadvertently flashes report implicating Najib during press conference-Asian Sentinel,January 27, 2016)

The Hollywood Reported has said:

n court papers quietly filed this past week, various entities connected to Red Granite Pictures co-founder Riza Aziz are attacking the U.S. government's attempt to seize real estate properties in the huge $1 billion action targeting alleged corruption of Malaysian public funds.

The Justice Department has touted the 1MDB case as its biggest kleptocracy case to date, but Aziz's lawyer, Matthew Schwartz, a former assistant U.S. attorney who once prosecuted Bernie Madoff, slams the U.S. government for failing to include "essential detail" about the supposed crimes. He's demanding a dismissal.

"[T]he Government's entire theory of the case presupposes that the Malaysia Attorney General's findings are factually and legally invalid," states the court papers. "There is therefore no way for this litigation to proceed without a ruling from this Court on whether the Malaysian Attorney General's sovereign functions were illegitimate.".

Where does one begin.............

END 

References 




Malaysia's AG admits that Najib is Malaysia Official 1, but strongly disagrees with US DOJ :Saudi donations, not stolen from 1 MDB

IPIC 's 1MDB settlement reported to involve billion dollar sale of financial instruments deemed worthless and tainted by fraud, to persons unknown

by Ganesh Sahathevan




Singapore's Straits Times reported this morning that Malaysia and Abu Dhabi had "reached a settlement on a dispute involving billions of dollars in debt obligations of scandal-scarred 1Malaysia Development Berhad (1MDB) that is at the centre of an international money-laundering probe."


The paper also reported:
A central piece of the proposed settlement calls for Malaysia to repay Abu Dhabi US$1.2 billion (S$1.7 billion) before the end of this year. The amount represents a loan and accumulated interest charges on a bailout financial package 1MDB received from Abu Dhabi’s International Petroleum Investment Company, or Ipic, in July 2015.
The bulk of the payment on the outstanding loan amount will come from the sale of so-called “fund units” from Brazen Sky Ltd, a financial unit owned by 1MDB, to an undisclosed buyer, according to the financial executives.

This writer has shown on a related blog that the "fund units" are worthless if not non-existent. It is a given that IPIC would be aware of the facts; after all, IPIC subsidiary Aabar is supposed to have provided a guarantee that gave the "fund units" any value in the first place,

IPIC cannot therefore claim to be an innocent recipient of billions which it would know are the proceeds from the sale of those units. IPIC would in fact be party to the continuing laundering of money stolen from 1MDB, perpetuated by an ever growing mountain of Malaysian  public funds

END 

1 MDB's US$ 2.3 billion "Cayman units" ,worthless, if not non-existent :
Evidence from Singapore's DPP 

by Ganesh Sahathevan


In the matters of Public Prosecutor v Yeo Jiawei and Public Prosecutor v Kelvin Ang Wee Keng. prosecutors have told the court:

Brazen Sky (a wholly-owned 1 MDB subsidiary)  owned all the shares of Bridge Global Absolute Return Fund SPC (segregated portfolio company), a fund that was managed by Bridge Partners.

This is contrary to what 1 MDB and Arul Kanda had to say about the Brazen Sky investments, that is, that Brazen Sky owned units in segregated portfolio company that was managed by some party external to 1 MDB. This story was only changed recently, when in a written reply to MP Tony Pua the Malaysian Ministry Of Finance said (as it turns, admitted) that there was no external manager. 
Consequently the entire series of transactions 1 MDB says were financed out of those units is in doubt, and 1 MDB's  current debts revalued upward accordingly.The existence of the units and any money that goes with it can be assumed to be a myth.
END 


See also 

Australia's ASIC finds no evidence of 1 MDB's Cayman units 

1MDB's Reply to Sarawak Report Allegations

1MDB has been made aware of an article, dated 10 October 2015, that has been published in the Sarawak Report, an online blog currently banned in Malaysia. This article has published selectively extracted materials and contains serious and unfounded allegations, in a clear attempt to manipulate readers with respect to events that have previously taken place at 1MDB.

1. 1MDB-Petrosaudi

The fund units, owned by 1MDB subsidiary Brazen Sky Limited, were originally valued at US$2.318 billion in September 2012, as the eventual outcome of various equity and murabaha loan investments totalling US$1.83 billion by 1MDB with PetroSaudi between 2009 and 2011. Over the investment horizon, 1MDB has received and reflected in its audited financial statements, cash returns, i.e. approximately US$81 million murabaha profit, and approximately US$263 million dividends from fund unit investments, i.e. a total cash return of approximately US$346 million and a total gain over time of US$488 million (US$2.318 billion less US$1.83 billion).

2. Fund Unit Redemptions

As of 31 March 2014, the fund units were valued at US$2.33 billion.  On 5 November 2014, at the time 1MDB's financial statements for the year ended 31 March 2014 were published,  an amount of approximately US$1.22 billion had been redeemed, in cash, with proceeds being substantially utilised for debt interest payment, working capital and payments to Aabar as refundable deposits for options termination.

A sum of approximately US$1.11 billion in fund units remained, which together with a dividend of approximately US$130 million, equates to the remainder sum of US$1.23 billion described in the notes to 1MDB's accounts.

On 14 and 24 November 2014, approximately US$170 million of the US$1.11 billion fund units were redeemed, in cash, leaving a balance of approximately US$940 million in fund units. On 2 January 2015, i.e. prior to Arul Kanda joining 1MDB, a final redemption of approximately US$940 million was undertaken through a sale of fund units to Aabar, with cash payment being deferred. (Note: Aabar was separately a guarantor of the fund in which the units were invested but by mutual agreement, the redemption was via sale of fund units instead of calling on the guarantee. This fund unit sale agreement was subsequently superceded via the Binding Term Sheet signed between 1MDB and IPIC, the "AA" rated parent of Aabar, on 27 May 2015, upon which a payment of US$1 billion was made by IPIC to 1MDB.)

3. 1MDB President and Group Executive Director Arul Kanda's comment

Whilst Sarawak Report has published a number of alleged 1MDB related documents in the past, which we now know to be stolen and possibly doctored goods, sourced from a convicted criminal, I can confirm that – in this particular case – it appears to have published an authentic 1MDB document, namely minutes of a 12 January 2015 Board meeting. This was the first 1MDB Board meeting I attended, i.e. a week after I joined the company on 5 January 2015.

At the meeting, I stated to the Board, based on my understanding of events that occurred before my time, that the redemption of fund units happened in cash for an amount of US$940 million. However, upon further investigation and verification, it became clear that this was a misunderstanding, which I then clarified to the Board and our shareholder, the Ministry of Finance. This clarification is clearly recorded in subsequent Board minutes and can be verified.

On 13 January 2015, I confirmed via a press statement that the remaining amount of US$1.11 billion had been redeemed, in full. What was unfortunately not made clear, was that the redemptions happened partly in cash and partly through the sale of fund units, with cash payment being deferred. It is this important distinction which caused a misinterpretation of my statement, first during a Business Times interview on 9 February 2015 and subsequently by the Ministry of Finance, in a Parliamentary answer on 12 March 2015.

I have explained in detail the sequence of events to the National Audit Department and to 1MDB's auditors, Deloitte, as part of their thorough and professional review of 1MDB's past transactions. In addition, I have openly and publicly taken full responsibility in June 2015 for the misunderstanding on this matter – i.e. the buck stops with me.

In my capacity as President, I answer to the Board and the shareholder of 1MDB. My strong track record speaks for itself and my only professional agenda is to fix the challenges in 1MDB. There is no need for me to lie or cover-up what has happened in the past, as has been alleged by those who make sensationalist claims to drive their own political agenda. Accordingly, I look forward to being questioned in detail on this matter at the upcoming Public Accounts Committee hearings and for my answers to be a part of the public record, to conclusively put this matter to rest.

Posted 29th April 2016 by Ganesh Sahathevan

"...return these stolen assets to their legitimate owners, the Malaysian people"-PM Najib intends to have Malaysia's people pay for a settlement intended to save him from prosecutors around the world

by Ganesh Sahathevan



Singapore's Straits Times reported this morning :

Malaysia and Abu Dhabi have reached a settlement on a dispute involving billions of dollars in debt obligations of scandal-scarred 1Malaysia Development Berhad (1MDB) that is at the centre of an international money-laundering probe.

A central piece of the proposed settlement calls for Malaysia to repay Abu Dhabi US$1.2 billion (S$1.7 billion) before the end of this year. The amount represents a loan and accumulated interest charges on a bailout financial package 1MDB received from Abu Dhabi’s International Petroleum Investment Company, or Ipic, in July 2015.

The settlement agreement also calls for both parties to enter into negotiations to resolve another dispute involving roughly US$3.5 billion in the form of cash advances and payments from 1MDB to IPIC that are now in dispute. Negotiations will commence early next year and must be concluded before December 2020, during which time both parties will stand down from pursuing any legal action, the executives said.

"... the deal could significantly dilute the international legal challenges confronting Prime Minister Najib Razak’s administration over the fallout from the 1MDB saga."

The Straits Times quoted unnamed banking and legal sources who asserted that the  settlement  removes all elements of illegality that led to the dispute in the first place, which include funds intended for IPIC being diverted from 1MDB to a shell company.

The DOJ has described the  transaction and others consequent to it as theft, and that its actions were intended to " return these stolen assets to their legitimate owners, the Malaysian people."

It is obvious that the  above settlement does no such thing and is in fact a further loss to the Malaysian people. Nevertheless, Najib and his bloggers are already on the offensive, rejoicing in what is seen as a masterful escape.As the blogger Rocky Attan put it:

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

If nothing else, there is now an admission out of Malaysia that Najib and his asscoaites are  facing the prospect of prosecution for stealing from 1MDB.
END

DCNS's l'affaire Adelaide takes shape: A horse, Defence Minister Marise Payne,and Lockheed Martin

by Ganesh Sahathevan

French Defence Minister Jean-Yves Le Drian (right) and Australian Defence Minister Marise Payne 

This writer has previously noted that DCNS's AUD 50 Billion submarine contract entered into with the Government of Australia seems not terribly different from other scandals the company has gotten into, including the the so-called l'affaire Karachi.

Now it seems the Defence Minister Marise Payne's love of race horses may provide some further clues.The Australian newspaper reported this morning :

Defence Minister Marise Payne co-owns a racehorse with a lobbyist whose company represents firms seeking lucrative Australian military contracts, including the Future Frigate project worth up to $35 billion.
Senator Payne is a co-owner of Tarakona, a largely unsuccessful four-year-old gelding, with a group that includes Matt Hingerty, managing director and chief executive of lobbying firm Barton Deakin.

Barton Deakin is recorded on the federal government lobbyist register as representing defence contractors, including Lockheed Martin Overseas Group, builder of the F-35 Strike Fighter; and Fincantieri SpA, the Italian shipbuilding company.

Not reported is the fact that Lockheed Martin Corp " won a bid to design and build the combat system " for the DCNS Barracuda submarines".

That contract is far ranging ,According to a DefenseNews report published on 18 April 2017:

Lockheed Martin will report this summer results of studies for potential suppliers of sonar and other critical systems for Australia’s planned fleet of 12 new attack submarines, said Mike Oliver, program director for the future submarine combat system.


“Lockheed Martin has been conducting trade studies in a number of key areas of the submarine’s design,” he told Defense News. “We are examining all options and will deliver the results of those trade studies in June to the customer.”

Sonar is among the key systems, the company’s program team said.
“The choice of sonar systems and arrays is in the hands of Lockheed Martin,” Marie-Pierre de Bailliencourt, general manager at DCNS, told Defense News..


Canberra in September selected Lockheed as combat system integrator, partnering with DCNS, which will design, build and service a fleet of 12 ocean-going diesel-electric boats. The program is worth AUS$50 billion ($38.1 billion) over some 35 years.

A survey of sonar and other systems marks a first step in a selection process that Thales hopes to win through its Australian subsidiary.


The French electronics company expects to secure more than €1 billion of deals, with €100 million per boat based on sonar systems, electronic warfare and periscopes. A towed sonar array is part of the kit.

END
 

Marise Payne co-owns horse with lobbyist

RORY CALLINAN The Australian
12:00AM April 20, 2017
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Defence Minister Marise Payne co-owns a racehorse with a lobbyist whose company represents firms seeking lucrative Australian military contracts, including the Future Frigate project worth up to $35 billion.

Senator Payne is a co-owner of Tarakona, a largely unsuccessful four-year-old gelding, with a group that includes Matt Hingerty, managing director and chief executive of lobbying firm Barton Deakin.

Barton Deakin is recorded on the federal government lobbyist register as representing defence contractors, including Lockheed Martin Overseas Group, builder of the F-35 Strike Fighter; and Fincantieri SpA, the Italian shipbuilding company.

Lockheed Martin has the contract to provide Australia’s strike fighters at a cost of up to $17 billion. Fincantieri is bidding for the Future Frigates, a project described as the largest of its type in the world and due to start in 2020.

Senator Payne this morning denied there is a conflict of interest involved in her co-ownership of a racehorse and her interests had been appropriately disclosed.

“There is certainly no conflict of interest there,” she told ABC.

“My interest in horse racing is a matter of clear public record, whether it’s through the parliamentary declaration process or through the normal processes associated with horse racing.

“I think that the story is one which The Australian has chosen to run, but I’m focused on my job in Japan and dealing with the regional security matters which are so important to Australia and so important to our allies and our partners.”

Senator Payne and Malcolm Turnbull last year announced that Fincantieri, BAE and Navantia had been short-listed for the project. The Defence Department awarded the three shipbuilding companies about $12 million each to participate in the process.

Senator Payne met Italian ­Defence Minister Roberta Pinotti in Australia in February during which she acknowledged “participation by Italy’s Fincantieri in Australia’s Future Frigate program”.

Senator Payne also used her official twitter account to tweet a picture and a positive comment about the February 20 meeting. Mr Hingerty then used his ­account to “like” the tweet.

Mr Hingerty ­yesterday ­confirmed his co-ownership of Tarakona but denied the connection had enabled him extra access to the minister or that he had ever discussed defence contracts with Senator Payne.

“Marise and I are 30-year friends and we share a common interest with racehorses and I’ve always looked for an opportunity to race a horse,’’ he said.

Mr Hingerty said he was not involved in Defence matters for Barton Deakin. “That’s my colleague, John Griffin, and he’s not involved in the racehorse,’’ Mr Hingerty said.

Efforts to contact Mr Griffin yesterday were unsuccessful.

When asked about liking Ms Payne’s tweet about the meeting with the Italian Defence Minister, Mr Hingerty said: “We are friends.”

Asked who the other 11 owners of the horse were, Mr Hingerty said they were friends and relations of Senator Payne and her partner, NSW Tourism Minister Stuart Ayres.

Mr Hingerty said some were friends of his. Two of the group appear to be relatives of Mr Ayres.

Senator Payne has listed her share in Tarakona on her register of interests. Racing records also list a syndicate called Padinga as one of the owners.

A spokesman for Ms Payne said there was no conflict of interest from the horse ownership.

He said the minister had not discussed any Defence contracts with Mr Hingerty.

Mr Hingerty has previously tweeted about defence matters including one example on July 22 last year in which he said he was “very privileged to be briefed by the former vice chair of the Joint Chiefs of Staff on US APAC ­policy”.

Yesterday he said the briefing occurred only as a result of the annual Amcham program and that it was “interesting but not relevant to any work I personally do”.

Mr Hingerty has also retweeted Senator Payne’s tweets about Defence matters, including one on February 17 in which she tweeted that it had been an ­honour to lay wreaths at Menin Gate, Polygon Wood and Tyne Cot cemetery for the Australians that fought and died during World War I.

Tarakona, which appears to be named after a dragon in Maori language, has not had any wins from nine starts, collecting prize money of $3680, according to racing websites.

Although Senator Payne ­declared the racehorse in her statement of interests published in September, she is not listed with the parliamentary website as having filed any other declarations since then.

Barton Deakin’s website says it can help clients if they are “a company needing to frame your investment project to maximum effect with the government”.

“Barton Deakin doesn’t just open doors — it helps you understand what is going on behind them, how to work your company most ­effectively with the Coalition in government or opposition and, most importantly how to achieve your government corporate strategy goals,’’ the website’s blurb says.

Rachel Baxendale contributed to this report

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EPF's Melbourne project: RHB extended a loan for the benefit of its director Ong Leong Huat-Bank Negara ought not have approved this transaction, MACC cannot pretend this elephant does not matter

by Ganesh Sahathevan

Previously reported on this blog:
EPF will finance OSK's Melbourne development with AUD 175 Million (RM 525 Million) in borrowed money.after providing Ong Leong Huat & family AUD 154 million and a AUD 38.2 Million upfront profit

As reported yesterday the EPF's AUD 175 million contribution has been provided by three Malaysian banks, including RHB Bank: 

Further research has shown that the EPF probably sought Australian dollar funding from Malaysian banks CIMB Bank Berhad, OCBC Bank (Malaysia) Berhad and RHB Bank Berhad ,very likely because Australian banks would not fund the project


Ong Leong Huat is also a director of RHB Bank and RHB Investment Bank.The details are provided on the RHB Group website, extracted and copied below:

Tan Sri Ong Leong Huat @ Wong Joo Hwa (“Tan Sri Ong”) was appointed as a Non-Independent Non-Executive Director of RHB Investment Bank on 20 November 2012 and was subsequently appointed as the Chairman of RHB Investment Bank on 23 January 2013. On 27 June 2016, Tan Sri Ong was re-designated as a Non-Independent Non-Executive Director of RHB Investment Bank. He also serves as the member of Board Nominating & Remuneration Committee.

Tan Sri Ong’s other directorships in public companies include RHB Bank Berhad, OSK Holdings Berhad, PJ Development Holdings Berhad (Chairman), OSK Property Holdings Berhad, OSK Ventures International Berhad, KE-ZAN (Holdings) Berhad. He is also a trustee of OSK Foundation.

RHB Bank has extended a loan for the ultimate benefit of a director.MACC and Bank Negara investigation and prosecution ought to follow.

END