MALAYSIA ‘SCREWED UP’ BY WORST FINANCE MINISTER NAJIB – RESERVES THE LOWEST IN ASIA THAT MoF UNABLE TO PAY EVEN US$600 MILLION DEBT?

This country is so screwed up that it couldn’t even pay US$600 million of debt to IPIC (International Petroleum Investment Company), Abu Dhabi’s US$80 billion sovereign-wealth fund. After the deadline on Tuesday, IPIC has given 1MDB (1Malaysia Development Berhad), a fund set up by Prime Minister Najib Razak himself in 2009, five more days to make the payment.

Najib Razak, who is also Malaysia’s finance minister, has rubbished that his administration was unable to pay but rather – it was a technical matter. He didn’t explain what the technical matter was but his pet project, which has been classified as a “Ponzi Scheme” by the Swiss Attorney General, said in a statement it was committed to meeting its obligations to IPIC.

1MDB said in a statement that it would pay in August 2017. But it did not specify a date in August. Obviously, 1MDB has trouble paying and is dragging its feet. But Mubadala, which now owns IPIC, wasn’t amused and said in a separate statement on Tuesday that 1MDB and the Malaysian Ministry of Finance (MoF) have just five days to resolve the non-payment.

But if Mr. Najib couldn’t even pay the first installment of US$600 million, chances are he would similarly default on the second installment of the same amount, which is due end of this year. That was part of the agreement between 1MDB and IPIC, which Najib has now defaulted. And there’re additional two bonds worth US$3.5 billion in total that 1MDB has to pay

Flashback – the agreement was reached after the Malaysian fund (1MDB) defaulted on its bonds in 2016, sparking a dispute with IPIC, which asked a London court to arbitrate a claim totaling some US$6.5 billion. 1MDB claimed initially that it was “confident in its legal position” and had even submitted a “robust” response through legal counsel. Of course, 1MDB failed to prove its innocence.

The long and short of the infamous 1MDB scandal is this. The 1MDB was part of a Ponzi scheme, which is the subject of money-laundering investigations in at least six countries, including the United States, Switzerland and Singapore. When the scheme was discovered and exposed, the bubble burst. It had accumulated debt of more than US$50 billion as of 2016.

Abu Dhabi was approached to bailout 1MDB. In return for unspecified amount of assets from 1MDB, IPIC agreed to lend US$1 billion to 1MDB and assume payments on US$3.5 billion of the Malaysian fund’s debt. It is believed that one of the assets sought by Abu Dhabi in the debt-for-asset-swap exercise was Bandar Malaysia. But that didn’t materialise.

Turned out, Mr. Najib “secretly sold off Bandar Malaysia” to somebody else – China. Bandar Malaysia became “Bandar China” via a sale of 16-plots of extremely valuable Sg. Besi land to China Railway Engineering Corporation (CREC), whom together with Iskandar Waterfront Holdings (IWH) forms a consortium (40:60 basis) and paid RM7.41 billion for a 60% stake in Bandar Malaysia.

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✍ Sumber Pautan : ☕ Malaysia Chronicle

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