P Gunasegaram Published
QUESTION TIME Does the release of the Public Accounts Committee (PAC) report last week exonerate Prime Minister Najib Abdul Razak of all wrongdoing in relation to 1Malaysia Development Bhd as the usual suspects are claiming? Absolutely not, because Najib is ultimately culpable for everything that has gone wrong at 1MDB.
We give 10 reasons why Najib must be held accountable for 1MDB - he is more accountable than anyone else, including one former CEO who may become the fall guy for this entire sad, sorry episode.
But before that, let’s dispel another notion. Does that PAC report say that all monies are accounted for in 1MDB and there was no wrongdoing? Absolutely not, although some are trying to paint the picture that way.
From all previous evidence, it is crystal clear that 1MDB was not a mistake but a wilful, scheming, brazen, unprecedented and greedy pilferage of billions of ringgit of the nation’s limited resources as comprehensively detailed out in this series of articles and many other sources of information in the last three years.
Just to summarise, mispricing of loans alone at 1MDB could have given others gains of as much as RM6 billion while a further RM4 billion involves strange collateral arrangements and exorbitant payments for options, clearly a means to siphon money out of 1MDB.
Questionable asset selection accounted for some RM27 billion, while overpayment of advisers come up to some RM2 billion and a payment to a Jho Low-linked company came up to RM2.6 billion. That’s almost RM42 billion lost and/or at risk.
Now back to those ridiculous, ludicrous and completely illogical attempts to absolve Najib of all blame for 1MDB. Here’s 10 reasons why he is the person most responsible and should be held accountable.
1. It is Najib’s brainchild. 1MDB was his idea in the first place. He conceived it and envisaged it as a strategic development company which will bring in foreign direct investment and enable investments in strategic areas. It is inconceivable that Najib will not be involved in every aspect of 1MDB’s operations. If it’s your baby, you will nurse it.
2. Najib is prime minister. As prime minister Najib has ultimate responsibility that the billions raised and invested by government companies are completely above board and are done for proper purposes.
If a state corporation goes into debt to the tune of RM50 billion and has little to show for it, Najib should have been on top of it.
Questions about 1MDB appeared in the media as far back as 2009 when it raised some RM5 billion in government guaranteed bonds at an excessive interest rate which gave those fortunate enough to get first bite at the bonds a windfall of some RM1 billion.
3. Najib is finance minister. Okay, as prime minister, he would have left matters to the ministers and others when it came to 1MDB, right? Even if that was a correct argument, he can’t plead that because he was and is finance minister - through the entire episode.
1MDB is directly and wholly owned by the Finance Ministry through Minister of Finance Inc, its corporate arm. In fact, all shareholder resolutions under the law has to be signed by the finance minister who is the shareholder’s representative.
Further, according to Article 117 (c) of 1MDB’s memorandum and articles of association, any financial commitment (including investment), restructuring or any other matter which is likely to affect the guarantee given by the Federal Government for the benefit of the company, the national interest, national security or any policy of the government, has to get written approval from the prime minister. Najib must have known about all of 1MDB’s major dealings.
4. Najib is chairperson of 1MDB’s advisory board. Although he is not chairman of the board of directors or on the board of 1MDB, he must have known of all the major dealings, and should have made it his business to know, as chairman of the advisory board.
5. Najib put it above GLC supervisory norms. Government-linked companies, or GLCs, have in the last few years undergone major transformation to strengthen their governance, ensure greater transparency, and set up detailed procurement practices, amongst others.
While governance of GLCs, especially those under government investment company Khazanah Nasional Bhd, have improved tremendously over the years, it was rather a strange thing to set up a company which would run up RM50 billion in debt with none of the control procedures which are now standard practice in other GLCs. Why?
6. Najib knew about the strange practices. From the foregoing, Najib knew or ought to have known about the strange practices happening at 1MDB. In fact, former 1MDB CEO Shahrol Azral Ibrahim Halmi had confirmed to the PAC that Najib approved the US$1 billion initial investment in the highly dubious PetroSaudi venture, 1MDB’s first major investment.
Also, as shareholder representative, Najib would have had to sign termination letters for 1MDB’s auditors after the auditors had raised important queries over the accounts of the so-called strategic development company. He would have known what were the issues the auditors raised when he decided to terminate their services.
7. Najib did nothing to stop strange and questionable practices. Despite knowing about these activities, Najib did nothing to further investigate these activities, to stop them and bring the culprits to book.
8. Najib quashed investigations into 1MDB. In fact, he quashed investigations into 1MDB when the former attorney-general (AG) was removed under extremely strange conditions and new a one was appointed in his place. The new AG not only exonerated Najib of wrongdoing in the unprecedented RM2.6 billion (now RM4.2 billion) “donation”, he dismantled a multi-agency investigative committee looking into 1MDB.
Meantime, the auditor-general’s report on 1MDB which has been substantially leaked in the foreign media, continues to be a classified secret under the Official Secrets Act to prevent its dissemination within Malaysia. Why put the one serious investigation on 1MDB under the infamous OSA if it is not to stop the spread of damaging information?
9. Najib denies any wrongdoing. Despite a mountain of evidence indicating major wrongdoing at 1MDB and further mounting evidence, Najib, BN and current 1MDB CEO Arul Kanda Kandasamy continue to sing the same refrain and insist that all is well at 1MDB.
And this when several international jurisdictions are already conducting serious investigations into the 1MDB money trail.
10. Najib could have put things right but he did not. When 1MDB mispriced its first RM5 billion bond issue way back in 2009 and raised eyebrows and suspicions in the international financial markets, it would have been the time to act, bring the miscreants to book and put this sad excuse of a “strategic development company” back on the right path. But that did not happen, raising very serious questions as to Najib’s role in the whole episode.
Yes, Najib is still very much accountable for 1MDB. Nothing in the PAC report says otherwise. And nothing in the PAC report says that all the money at 1MDB is accounted for and that there were no questionable or corrupt practices at 1MDB. Anyone who says otherwise is simply lying.
Former editor now consultant, trainer and writer P GUNASEGARAM likes this quote by Joe Biden: “Fighting corruption is not just good governance. It’s self-defence. It’s patriotism.” E-mail: firstname.lastname@example.org.