Ganesh Sahathevan

by Ganesh Sahathevan As earlier reported : The deadline has arrived, the deals have been done ,and the rough tally stands at  RM 12.35 B + RM 7.4 B  equals RM 19.75 B , which  is not equal  USD 5 B  ,and counting ............ Consequent to the above post   1 MDB CEO Arul Kanda has said : ..... the first step in the rationalisation plan was achieved through the debt-for-assets swap with International Petroleum Investment Company (IPIC), which reduced 1MDB’s debt by RM16 billion. The second step was completed with the sale of all its energy assets. 1MDB initiated the sale through the execution of a share sale and purchase agreement on November 23. The sale will reduce its debts by up to RM17 billion once the transaction is completed by February next year. “And now, on the last day of the year, the end of the six-month period that was promised by the honourable prime minister of Malaysia, Datuk Seri Najib Razak, we have achieved the final piece of the puzzle,”...

by Ganesh Sahathevan  The deadline has arrived, the deals have been done ,and the rough tally stands at  RM 12.35 B + RM 7.4 B  equals RM 19.75 B , which  is not equal USD 5 B ,and counting .............stories below tell the tale: IPIC re-issues 30 June accounts ,which EY has "reviewed" but cannot express an opinion-Details on 1 MDB debt suggest an indeterminate sum north of USD 5 billion 1MDB to sell 60% of Bandar Malaysia to Iskandar, China group for RM7.4 billion 1Malaysia Development Bhd (1MDB) has agreed to sell 60% of its equity‎ in Bandar Malaysia Sdn Bhd for RM7.41 billion, as part of its rationalisation plan to reduce its RM45 billion debt, it says today. ‎The stake was sold to a consortium comprising Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corporation (M) Sdn Bhd, said 1MDB. 1MDB will receive a 10% deposit, or RM741 million, upon the execution of the share sale and purchase agreement, and the transaction is expected to be ...

by Ganesh Sahathevan It has been previously reported on this blog that PM Najib has in response to a question from Tony Pua MP effectively conceded that what 1 MDB owes IPIC is " potentially a very,very large sum ". Now it seems there is conformation from IPIC of  that fact.IPIC has for some reason re-issued its accounts for the period ended 30 June 2015, which have been "reviewed" by Ernst & Young Abu Dhabi, who say that being only a "review" and not an audit, they must refrain from expressing an opinion. Be that as it may, the relevant part of the IPIC accounts state,at Note 22 on Page 29 : By 30 June 2016 IPIC is to have received a transfer of assets with an aggregate value of an amount which represents the sum of the Cash Payment, the Assumption of Debt and the Debt Forgiveness. While this form of words is not new and IPIC has used it that same form of words since informing the LSE of its 1 MDB debt matter,what is interesting here are the figures f...

by Ganesh Sahathevan The WSJ's latest story on 1 MDB brings the 1 MDB matter well and truly within the jurisdiction of the United Kingdom, given the evidence of a sham transaction involving a BVI dummy company.  The British Virgin Islands are an internally self-governing overseas territory of the United Kingdom . The Territory is constitutionally autonomous of the United Kingdom and internally self-governing, with a Governor appointed by the UK as therepresentative of the British Crown.The Governor is responsible for defence, external affairs, the civil service, the local police force and the administration of justice,.  That being said, even if for some reason it is determined that UK law does not apply in this instance, it is unlikely that the UK is going to let minor legal technicalities get in the way of a billion dollar affair,given the international desire for better enforcement of money laundering and terrorist financing laws.  The BVI has managed to stay clean de...

by Ganesh Sahathevan The Wall Street Journal's Bradley Hope reported today, 17 December 2015 : A 1MDB unit transferred at least $850 million via three transactions last year to a British Virgin Islands-registered company with a name that made it look like it was controlled by IPIC, according to wire transfer documents viewed by the Journal and two people familiar with the matter. The 1MDB fund sent the money to “Aabar Investments PJS Ltd.” which closely resembles the name of IPIC’s wholly owned subsidiary Aabar Investments PJS, the wire documents show. The background to today's story , Hope explains: The 1Malaysia Development Bhd. fund, or 1MDB, set up by Malaysian Prime Minister Najib Razak  in 2009 to promote economic development, is  under investigation  in at least six countries over a broad array of allegations that money was siphoned off for political spending and for personal gain. One focus of investigation is $2.4 billion in payments that 1MDB said it made to a...

by Ganesh Sahathevan The story below by The Australian's Ben Butler, and in particular the excerpts below suggest   a financial link    between 1 MDB's Cayman "units" and Harvest Court Bhd takeover battle: Excerpts  The report, compiled by Simon Wallace-Smith and Richard Hughes of Deloitte and released to The Australian by the court, also reveals that a Cayman Islands vehicle linked to the 1MDB scandal is the owner of the Avestra Credit Fund, which backed a takeover bid against Malaysian company  Harvest Court Industries . Mr Wallace-Smith and Mr Hughes said management told them the Caymans company, Bridge Global CMC, was set up “to appeal to institutional investors (particularly from Malaysia and Hong Kong)”. Other documents filed with the Federal Court by the  Australian Securities & Investments Commission  show Bridge Global CMC is a portfolio (a segregated part) of Bridge Global Absolute Return Fund, which Malaysian and Singaporean media h...

by Ganesh Sahathevan While Moody's has decalred in its headline that  China General Nuclear Power Corporation's (CGN, A3 stable)  rating is not affected by its announced acquisition of Edra Global Energy Bhd (Edra, unrated), the part relevant to Malaysian consumers it the Moody's announcement is this: CGN's financial metrics remain weak because of its ambitious debt-funded expansion, both domestically and overseas. We estimate the debt/EBITDA will measure around 12x in 2015, based on pro-forma consolidation of Edra's end-March 2015 financials and assume the transaction is fully debt funded, compared with 13-15x in our original projections for CGN. Clearly, CGN is cash flow hungry and that cash flow can only come from higher tariffs.  END    Moody's: China General Nuclear's Rating is Unaffected by the Acquisition of EDRA    Global Credit Research - 26 Nov 2015 Hong Kong, November 26, 2015 -- China General Nuclear Power Corporation's (CGN, A3 stable) rat...

by Ganesh Sahathevan  In yet another Mahathir put-down , 1 MDB and its CEO Arul Azrul Iskandar Kandasamy said: ..........1MDB said it intends to settle is US$3.5 billion bond with International Petroleum Investment Company (Ipic) through an 'asset-for-debt' swap. “This envisages 1MDB transferring to Ipic, 1MDB assets comprising USD denominated cash deposits and USD denominated fund units, in return for Ipic taking over the USD3.5 billion of bonds that it has guaranteed,” it said. However, as 1 MDB itself said not too long ago : MDB said that it can also confirm that IPIC did provide and continued to provide the guarantees for the principal and interest of two US$1.75 billion bonds it had issued, with a total principal and interest amount of approximately US$5.5 billion. IPIC's statement on the matter to the London Stock Exchange confirms that the amount owed is approximately US$ 5.5 billion, and not a mere US$ 3.5 billion that Arul wants us now to imagine: Regulatory Story ...