SINGAPORE CREATES AN AML/CTF CONUNDRUM FOR BANKERS DEALING WITH THE MALAYSIAN GOVERNMENT, ITS MINISTRY OF FINANCE , PM NAJIB, AND HIS ASSOCIATES.
PM’s Signature (And Only His Signature) Was On Every Decision Of 1MDB. Being Minister For Finance every banker in Malaysia or wanting to do business in Malaysia would have sought that signature on any number of approvals. This includes ANZ, which will soon be seeking Najib’s formal approval to sell its stake in AMBank,
by Ganesh Sahathevan
In another “world first” the Malaysian Government, its Ministry of Finance , PM Najib, are in a position where they continue to maintain that nothing at all was stolen or otherwise misappropriated from the Malaysian sovereign wealth fund , 1MDB, and its subsidiaries, when even neighbour Singapore, which has beenfitted enormously by being banker to Malaysia,now insists,, in no uncertain terms:
“The main victim in this case is 1MDB”
“This case” is of course the 1MDB theft and related matters of money laundering, detailed in excrutiating detail by Singapore’s Public Prosecutor, the US Department Of Justice and Switzerland’s FINMA. The US DOJ has even provided details of how money stolen from 1MDB was used to buy about ten million dollars worth of diamonds for Australian model Miranda Kerr , and a USD 25 million pink diamond for the PM’s wife, Rosmah Mansor.
It is undertsandable that PM Najib, who is also the Minister For Finance , take a “nothing to see” attitude, but what of the bankers who do business in Malaysia, and quite likely the Malaysian Government?
How does one deal with a client who is a government that is prepared to deny the theft of billions from its coffers, even as other governments insist that the crime has occurred?
How do bank CEOs and chairmen based in the accusing countries account to their own governments and regulators. Citi,ANZ, Standard Chartered and HSBC have long history of doing business in Malaysia and its government. Standard Chartered has already paid 1MDB related fines in Singapore.
PM’s Signature (And Only His Signature) Was On Every Decision Of 1MDB
The sums of US$700 million and US$330 million, which were misappropriated to Good Star Limited, a company unrelated to the purported 1MDB-Petrosaudi joint venture in 2009 and 2011.
US$3.51 billion, which was paid to a British Virgin Islands (BVI) incorporated Aabar Investment PJS Limited “Aabar (BVI)” in the form of collaterals, options termination compensation and further unexplained “top-up security” payments despite obvious doubts over who owns Aabar (BVI).
US$940 million worth of “units” which was parked at the Swiss Bank branch of BSI Bank in Singapore.
another US$1.56 billion of investments by 1MDB’s wholly-owned foreign subsidiary, 1MDB Global Investments Limited, which also could not be verified by the Auditor-General.
Dazzling with ‘big names’
Orders from Najib over-ruled 1MDB Board, thanks to Sec 117
“The Public Accounts Committee (PAC) found Mr Shahrol to be in violation of the shareholders [decision] not to proceed with publication IMTNs. Mr Shahrol also made a mistake by signing the agreement without any power conferred by the board of directors.The PAC was informed by Mr Shahrol, he did not follow orders to stop the issuance of RM5 billion Islamic Medium Term Notes and bonds did not follow the instructions of the Board as the power actually lies with the shareholders in accordance with Section 117 of the Articles of TIA Berhad. [Google Translation of PAC report]
What Halmi was saying was that, under the provisions of this Section 117, he had obeyed the higher authority of the sole shareholder and signatory of the company, rather than the Board.
It means that although the 1MDB Board had told Halmi to halt the plans to borrow RM5 billion, given the ridiculous rates, Najib, the grand new Finance Minister/Prime Minister in charge of the fund, had counter-manded him to take no notice and go ahead anyway.
Halmi, in accordance with the rules of the company, had obeyed the boss who had also recruited him, namely Najib.
There is no other way to interpret Halmi’s reference to Section 117 as his reason for defying the Board, not just on this occasion but on numerous other occasions with respect to the PetroSaudi joint venture in 2009. For example, he refused to halt the deal until a proper valuation of PetroSaudi was obtained, as had been requested, and he refused to send the money back when Board members discovered USE$700 million had been sent to Good Star Limited, which was unrelated to the Joint Venture.
This is all very clearly spelt out in the report by the PAC and so makes a mockery of attempts to claim that it did not hold the Finance Minister cum Prime Minister totally accountable for this fraud, which was launched just weeks after he had stepped into his new position of power in April 2009.
Interestingly, Halmi was in fact back-dating the existence of these provisions in the articles of 1MDB at the time he made these excuses to the PAC in 2015, because Section 117 was not added to the company’s articles of association until the change-over from its status as the Terengganu fund to 1MDB in September of 2009 – just days before the signing of the PetroSaudi deal, but weeks after Halmi had defied his original Board by borrowing all that money!
Never mind, it just goes to show the naked truth about the way that 1MDB was conceived and run by Najib and his side-kick Jho Low from the very start. Halmi knew who he was supposed to take his orders from and to hell with the letter of the law – in Malaysia, where the PM had total control such matters could be fixed.
According to reports, Halmi is still telling people that Najib is ‘unshakable’, so he considers himself ‘safe’.
Kings and State to State Partnerships
The technique of ‘fixing’ things by asserting power and grandeur under-pinned the entire strategy of 1MDB. The PAC has analysed this Jho Low-constructed bluff (already exposed by Sarawak Report).
In short, 1MDB did not just do investment deals, it engaged with powerful and impressive friendly states in ‘government to government’ diplomacy (supposedly), making any questioning or criticism of Najib’s actions appear – well churlish and unpatriotic!
Thus the PetroSaudi deal was described to the 1MDB Board as a crucial state to state venture with none other than the Kingdom of Saudi Arabia. Manager Casey Tan even briefed the Board that the PetroSaudi had been set up in 2000 and personally belonged to King Abdullah.
This was a total lie, just as managers had previously lied that the Abu Dhabi Mubadala fund was investing in Iskandar in May 2009 (which was immediately denied) and later in 2013 lied that Abu Dhabi’s Aabar was investing in a ‘strategic partnership’ in Kuala Lumpur’s so-called Tun Razak Exchange (which remains unbuilt).
Emails obtained by Sarawak Report, sent between 1MDB’s lawyers Wong & Partners and PetroSaudi’s legal team at the time, make totally clear who the beneficial owners and decision makers were on each side of this deal, since the correct details needed to be given to the banks receiving the money:
Dato’ Seri Najib Razak’s signatures are littered all over 1MDB as he was the ultimate decision maker who signed off resolutions to sack 1MDB’s auditors, Ernst & Young and KPMG, to invest US$1.83 billion in the failed Petrosaudi joint venture, to borrow US$6.5 billion of bonds via Goldman Sachs and to overpay for the RM12.1 billion of power assets.
No foreign bank statements!
There is a final damning aspect to the evidence of the PAC, which is matched, the report says, by the findings of the Auditor General. This is the persistent refusal of 1MDB to produce any statements or evidence whatsoever to account for the expenditures of those foreign companies and accounts into which so much of 1MDB’s public money was placed (i.e. US$7 billion).
There can only be one conclusion as to why Arul Kanda spent and entire year pretending he didn’t understand the following simple question: ‘Please show us the bank statements’.
The obvious answer was that he simply does not have them. And the reason he does not have them is that 1MDB’s money had been deliberately siphoned out through these companies to third parties entirely – they were nothing to do with 1MDB!
This was the reason why Kanda, in his early days in the job last year was forced to fax a forged copy of a bank statement for Brazen Sky account in Singapore to BSI bank, which was supposedly holding a billion dollars for 1MDB.
Kanda asked the bank if the statement was true and (according to a letter from Singapore investigators obtained and published by Sarawak Report) the bank was forced to reply that the information was wrong. Kanda did not have the correct bank statements!
Likewise, Good Star Limited, which received US$700 million of 1MDB’s original billion ‘investment’, belongs to Jho Low, according to extensive research by Sarawak Report, which Jho Low has never contested.
1MDB has no idea what happened to money sent abroad
For this reason the PAC report specifically condemns 1MDB and Shahrol Halmi, who persisted in claiming that Good Star Limited belonged to PetroSaudi, but were never able to produce any documentary evidence that it did.
Neither could 1MDB produce any evidence that the company Aabar Investments PJS Limited (BVI) was linked to the Aabar sovereign wealth fund in later ‘joint ventures’, where than US$3.51 billion was paid in return for a for a loan guarantee of just US$3.5 billion!
What kind of a finance manager was Najib to sign off on a deal like that? What could have possessed him? Could he have ever been allowed to do such a thing if any of his tiresome apparatchiks from the Finance Ministry been looking over his shoulder?
Of course, last week The Wall Street Journal published the telling information that no less than US$150 million went from this Aabar Investments PJS (BVI) went straight to the movie production company belonging to Najib’s step-son Riza Aziz in Hollywood.
Now this is one thing (at last) that does start to make perfect sense!
Add to that the remarks of the Swiss head of the Financial Investigation Agency FINMA at the end of last week. He said:
At which point, who in Malaysia can give a shred of credence to the claims by such fellows as Tengku Adnan, Umno secretary-general, that the PAC Report has “proved” that the Prime Minister had nothing to do with the decisions at 1MDB or that he has been some way “slandered”?
And who can believe pathetic ‘Sirul’ Halmi’s sad insistence that nothing wrong or illegal ever happened at 1MDB?