Arul Kanda and 1 MDB say "rationalisation plan" is a sham -Something about IPIC swapping assets with itself

by Ganesh Sahathevan 

 

 This paragraph is from the 1 MDB press release issued yesterday: 

 

The remaining US$940 million of fund units, are guaranteed by Aabar and have been ear-marked for a “debt for asset swap” with its “AA” rated parent, IPIC, as part of the 1MDB rationalisation plan.

 

 

That IPIC would consider  1 MDB's Cayman  "units"   assets  beggars belief given that the only value those "units" have derives from the guarantee IPIC itself has provided (via wholly owned subsidiary Aabar).

To believe that IPIC would accept those units  as repayment of a debt owed to it by 1 MDB one must partake of  the magic mushrooms that 1 MDB's CEO and senior management seem to be consuming in copious quantities.

To accept that IPIC's and 1 MDB's auditors would recognize the so-called
“debt for asset swap” in the terms described by 1 MDB as a transaction that can be recognized in their books is to imagine that  the auditors have a death wish, happy to cut their own throats by accepting as an acquisition for value a transaction in which the asset acquired is already owned.

END

 

 

 

Corporate, Featured and Exclusive  |  OCTOBER 9, 2015 11:23PM

1MDB: RM7.5 bil was utilised for debt clearing

Story by

KINIBIZ

editor@kinibiz.com

Below is the media statement issued by 1Malaysia Development Bhd (1MDB) president and group executive director Arul Kanda Kandasamy on Oct 9, in response to Bank Negara Malaysia’s statement issued earlier on its decision to revoke 1MDB’s approvals for RM7.5 billion foreign fund transfers:
1MDB refers to a statement issued today by Bank Negara Malaysia (BNM). Since commencement of BNM investigations in June 2015, the current management and Board of 1MDB have fully cooperated, which resulted in investigation papers being submitted to the Attorney-General’s Chambers (AGC).
Apart from submitting written answers and sharing relevant documents, 1MDB Board members, current and former staff were interviewed by BNM, with detailed witness statements being recorded.
BNM clarified today that it recommended criminal proceedings to the AGC for reasons of   “… inaccurate or without complete disclosure of material information …” and not for money laundering or other alleged criminal actions as highlighted by certain media and opposition politicians. However, the AGC, as the legitimate authority for such matters, decided that there was “no offence committed by 1MDB officials” and directed that “no further action should be taken”.
Notwithstanding this direction by the AGC, BNM has issued a Direction for 1MDB to repatriate a sum of US$1.83 billion. This relates to certain historic Permissions granted by BNM between 2009 and 2011 for 1MDB to make overseas investments. It is pertinent to highlight that those Permissions, when granted, had no requirement for funds to be repatriated. Further, the use of those funds have been described in detail in the notes to 1MDB’s publicly available financial statements dated 31.03.2009.
The overseas investments of US$1.83 billion relates to historic equity and murabaha loan investments in a joint venture with PetroSaudi in 2009 – 2011, that was eventually converted in September 2012 into fund units valued at US$2.318 billion. As previously explained by 1MDB to BNM, this sum of US$2.318 billion has been redeemed in 2014 and 2015, with proceeds being substantially utilised. The remaining US$940 million of fund units, are guaranteed by Aabar and have been ear-marked for a “debt for asset swap” with its “AA” rated parent, IPIC, as part of the 1MDB rationalisation plan.
It is, therefore, clear that the original US$1.83 billion sum has either been spent or ear-marked for debt settlement arrangements, that will result in a substantial reduction of 1MDB’s debt, per the rationalisation plan. 1MDB has painstakingly provided multiple detailed written and verbal explanations of these facts to BNM between June and end-September 2015.
1MDB fully acknowledges and respects the authority of BNM to revoke its earlier Permissions and to issue any Direction it deems fit under the Financial Services Act 2013, despite the AGC confirming that no offence was committed by 1MDB officials. 1MDB commits to cooperate and continue engaging with BNM, to address their concerns and seek a viable resolution of this outstanding matter.