COMMENT Now that The Edge Financial Daily has fired its latest and most lethal salvo at 1MDB fund accusing it of fraud, deception, corruption, theft and international money-laundering, Prime Minister Najib Abdul Razak has no choice but to answer to the indictment or sue The Edge media group.
The Edge Financial Daily yesterday blasted the country’s sovereign fund with a four-page exclusive complete with flow chart tracing the hot money entitled ‘How Jho Low & PetroSaudi Schemed to Steal Money From the People of Malaysia via 1Mdb’.
Its exposé is fraught with danger. Apart from defamation, the publication has opened itself to possible prosecution under the country’s Banking and Financial Institutions Act 1989 (Bafia), Sedition Act 1948, Official Secrets 1972, Printing Presses and Publications Act 1984, Communications and Multimedia Commission Act 1998, or laws relating to false reporting, all of which defence is unlikely to succeed because of the ambiguity of such legislation.
Mere possession of information deemed ‘protected’ or ‘false’ is enough to secure a conviction.
Yet Ho Kay Tat, publisher of The Edge Financial Daily with tacit support from the owner, businessman Tong Kooi Ong, said in a note accompanying the exposé: “We have a duty to find and report the truth. Our reports on 1MDB had exposed how a group of individuals - Malaysians and foreigners - schemed a multi-billion ringgit fraud against the people of Malaysia.”
The prime minister was stunned into silence by The Edge Financial Daily, while 1MDB’s newly appointed president Arul Kandasamy (photo) was quick to issue a statement dismissing the report as“irresponsible reporting”.
“We are surprised that these old and unproven allegations are being recycled yet again, when in fact there are multiple ongoing investigations being conducted by the lawful authorities on the issues raised previously.”
Arul surely misses the point. Irresponsible reporting or not, the allegations if not rebutted intelligently may cost Arul his job and indeed Najib’s his.
These are some of the allegations by The Edge:
The US$1.83 billion 1MDB invested in Petro Saudi International between 2009 and 2011 was a scheme to defraud Malaysia. That’s a lot of money, nearly RM7 billion which is enough to build 270,000 low-cost flats.
The joint-venture agreement was signed on Sept 28, 2009. This is less than six months after Najib assumed office as PM.
PetroSaudi Holdings committed FRAUD (emphasis by The Edge) by selling assets which it did not own into the JV Co. 1MDB is implicated in the alleged fraud so is Najib.
There was also FRAUD (again emphasis by The Edge) in the creation of a fake US$700 million loan from PetroSaudi Holdings to the JV Co. The remittance of the US$700 million from 1MDB to Good Star at its bank account at RBS Coutts (Zurich) approved by then-1MDB CEO Sharol Halmi was done without the consent of the 1MDB board of directors which had approved payment of the entire US$1 billion directly to the bank account of the JV Co at JP Morgan Suisse (SA). Two directors of 1MDB - Mohd Bakke Salleh and Azlan Zainol - resigned because of this payment of US$700 million to Good Star. Again, 1MDB is implicated in this alleged fraud, so is Najib.
This transfer of the US$700 million was also a breach of the approval given by Bank Negara Malaysia (BNM) for 1MDB to remit US$1 billion for the JV. BNM approved payment to the account of the JV Co at JP Morgan Suisse (SA) and not to anyone else. The question is how can an elephant-size breach like this escape the eyes of central banker Zeti Akhtar Aziz? And why put her on the four Tan Sris’ panel to probe 1MDB when she may be negligent of fiduciary duties?
Good Star was controlled by Jho Low at the time 1MDB transferred US$700 million. Again, was Bank Negara sleeping or did someone tell them to keep their eyes close so the elephant can pass unnoticed?
Between June 2011 and September 2013, Good Star remitted a total of US$529 million in several transfers to a bank account at the Swiss private bank BSI in Singapore that belonged to Abu Dhabi-Kuwait-Malaysia Investment Corp (ADKMIC).
Good Star Limited received in total about US$970 million from the US$1.83 billion that 1MDB invested with PetroSaudi Holdings Cayman between 2009 and 2011. From this amount of US$970 million, US$529 million went to the bank account of Abu Dhabi Kuwait Malaysia Investment Corp (ADKMIC) at BIS Bank in Singapore. Jho Low was the beneficial owner of that account.
Opposition DAP lawmaker Tony Pua has accused Arul Kanda of lying over this transaction.
The Edge’s report concludes that, “All these point to a clear case of fraud and international money-laundering. 1MDB’s money went from Malaysia to Switzerland via US clearing banks and then to the United Kingdom, the UAE and Singapore.”
“What happened to 1MDB’s money is no longer a domestic issue but is a global fraud and money-laundering matter involving the United States, the United Kingdom, Switzerland and Singapore. Global banks like JP Morgan, RBS Coutts, Credit Suisse, HSBC, Citibank, Deutsche Bank, BSI and others have all been channels for the money flow.”
Mere denial is no defence
Arul Kanda better learn quickly that mere denial of such far-reaching allegations against 1MDB is no defence. Sensational reporting or not, 1MBD simply has to get the truth out.
1MDB is directly the responsibility of Najib as both prime and finance minister as well as head of 1MBD advisory panel. 1MDB is Najib’s brain child and nothing takes place without his knowledge or permission.
The buck stops at his desk. He cannot outsource his job to half-past-six spinmeisters or tukang karut like Urban Wellbeing, Housing and Local Government Minister Abdul Rahman Dahlan who bought unemployed Lester Melanyi’s (photo) confession that Sarawak Report founder Clare Rewcastle-Brown had hired him to demonise the prime minister over 1MDB.
While awok awok singers who parrot Rahman’s spin like Communications and Multimedia Minister Ahmad Shabery Cheek cannot hope to do any better by blocking Sarawak Report’s site.
What The Edge media group has done is basic journalism - the pursuit of truth is journalism’s first obligation. If at all the prime minister felt demonised, he should not hire ghost busters. He must expose the lies and defend the truth.
BOB TEOH was formerly secretary-general of the Confederation of Asean Journalists.