MP SPEAKS | Last week I said former prime minister Najib Abdul Razak was making a complete fool of himself by showcasing how financially illiterate he was, after claiming that the government could redeem 1MDB bonds early to save on interest.
This, as I have previously responded, is not practically possible as bonds are structured very differently from loans taken from banks.
Yesterday, Najib claimed that 1MDB could have instead made RM9.7 billion in profit. This statement only confirms that our former finance minister is indeed financially illiterate.
Najib wrongfully argued that, since there were only RM17 billion of debts to be repaid, if we were to sell Bandar Malaysia for RM12 billion, and enforce the Abu Dhabi guarantee of US$3.5 billion (RM14.7 billion), 1MDB would make a profit of RM9.7 billion.
Firstly, a first-year accountancy student will be able to educate Najib that the latter has completely confused a company’s ‘balance sheet’ with its ‘profit and loss’ statements.
A ‘balance sheet’ typically records a company’s assets and debts, while the ‘profit and loss’ talks about 1MDB’s accumulated revenue (very little) and cost (including massive interest expenses) over the past 13 years. Najib has completely messed up the two.
Guarantees don’t work like that
Secondly, it is utter stupidity to say that if the Abu Dhabi guarantee of US$3.5 billion could be enforced, and that’s a very, very big ‘if’ – the matter is in UK courts at this point of time – then 1MDB gets away scot-free, and will get to keep its remaining assets. Guarantees don’t quite work that way.
Najib has perhaps forgotten that he, as the former finance minister, signed a back-to-back guarantee with Abu Dhabi, on behalf of the Malaysian government.
This means that if 1MDB failed to repay the US$3.5 billion bond, and Abu Dhabi was required to fulfil the guarantee, then Abu Dhabi can make the claim against both 1MDB (whose current assets don’t add up to anywhere near US$3.5 billion) and the Malaysian government. So the rakyat would have to pay, regardless of the guarantee.
Yes, that is the extent of Najib’s idiocy.
Bandar Malaysia land
Thirdly (do I really need a thirdly?), he also seems to have forgotten that the Bandar Malaysia land was owned by the government, even before it was sold to 1MDB for a song (at RM72 per square feet).
Hence if the Bandar Malaysia land can indeed be sold for RM12 billion, the entire proceeds should be kept by the government for other development projects and welfare benefits. Why should it be used to pay 1MDB debts when 1MDB had added zero value onto the land?
Sizeable chunk ‘misappropriated’
Najib has shamelessly ignored the fact that the reason the remaining debts that the government still has to repay is ‘only’ RM17 billion, is because after he was deposed in 2018, the subsequent governments successfully recovered a sizeable chunk of the money Najib “misappropriated” (diseleweng) – to quote Finance Minister Tengku Zafrul Abdul Aziz’s reply in Parliament yesterday.
Will Najib please respond to the fact that he “misappropriated” the tens of billions of ringgit which the Pakatan Harapan and subsequent government successfully recovered from those who were complicit in his crimes against the Malaysian people – Goldman Sachs, Low Taek Jho, better known as Jho Low, and his friends, Ambank and even auditors, KPMG and Deloitte Malaysia.
What about the fact that the United States FBI investigator testified in former Goldman Sachs employee Roger Ng’s corruption trial yesterday that Najib received US$756 million from the funds stolen from 1MDB?
Or is Najib going to continue to give his hilarious excuse that it was “donations from Arab royalty”?
Or better still, that he didn’t know where the money was from, or why it was deposited, but he spent some of it anyway, reportedly on expensive jewellery, birthday presents for his wife, or luxury holidays as well as buying political support in Umno and for elections.