那几 Najib 在骗你们
How to clear the deck on 1MDB
A loop-back rail-for-debt deal
On paper, finalised and ready for award on Aug 05. Here is their deal:
Original exclusive contract MYR27 bn is inflated to MYR57 bn.
Total CCCC cost of acquiring all remaining parts of 1MDB and its worthless companies and fund units: USD7.5bn or MYR30 bn. (See ‘Appendix’ A image, near bottom of post).
Term Sheet, China’s obligations:
- (a) End July, CCCC assumes USD4.78 bn of 1MDB (i.e. 1MDB Energy) debt to IPIC, due between Oct 2016 and 2022.
- (b) Pay on 1MDB’s behalf USD850 mn to IPIC;
- (c) Buys at USD315 mn, two Jho Loh-affiliated companies, Loh Corporation Berhad and Putra Perdana Berhad.
- (d) Acquisition of 1MDB Ayer Hitam (Penang land, at USD850 mn, payment to IPIC);
- (e) Acquisition of 1MDB Global Inv. (USD940 mn);
- (f) Acquisition of 1MDB Brazen Sky (USD1.56 bn); and,
- (g) Acquisition of 100% of 1MDB Energy Holdings [Price (a) = USD4.78 bn]
Term Sheet, MoF obligations:
- (a) railroad contract price fixed at almost MYR60 bn (original MYR27bn + additional MYR29.8 bn);
- (b) 10-year tax breaks, income tax and GST;
- (c) support bank credit guarantees; and,
- (d) ease land acquisition.
- 2016 Jul 25 (yesterday): Proposal dispatched to Cabinet
- 2016 Jul 27 (tomorrow is Wednesday): Approval by Cabinet
- 2016 Aug 05: Letter of Award
- 2016 Aug 19: Start of payments, to 1MDB USD850 mn; other payments to Loh & Loh and Putra Perdana.
Remarks & Comments (for Malaysians)
It appears that there are two separate deals but merged: (a) first, for the East Coast rail contract for delivery at MYR27 bn and after that (b) the 1MDB portion which is valued by CCCC at MYR30 bn (USD7.5 bn). The CCCC calculation is the near exact sum in 1MDB total losses (money ‘unverified’), estimated by the Auditor General as well as others.
Doubling the rail contract price returns, by back looping, the cost of bailout from CCCC to Malaysia so that, on the surface, Najib Razak is seen to have not only resolved the 1MDB scam but also without incurring a sen. (The original posting title ‘China Bails Out Najib-1MDB’ was misleading and has been corrected. Even so, that was the intent of the delusion Najib and Arul Kanda had wanted to create. They are always so good with the deception, explaining, therefore, why they are crooks.)
China had already bagged the rail contract so that the 1MDB portion was clearly added later, as an after thought. This meant that 1MDB wasn’t introduced into the contract negotiation at the beginning, which, with these things, it would have been a long time ago, a year at least. When IPIC filed suit some weeks ago, Arul Kanda went round looking for a bail out. On the China side, and to explain the addition of the high-risk 1MDB part, the circular (images below) was therefore prepared and circulated.
This deal wipes clean the slate at 1MDB, completely — with IPIC especially, and with 1MDB Energy (which underwrote the USD bonds along with IPIC); selling one of the last two pieces of land, Ayer Hitam; and by transferring ownership out of Brazen Sky, 1MDB Global Investments, Putra Perdana and others. It means China picks up all their liabilities, along with all of 1MDB’s criminal past and any asset issued in its name but frozen in the US and elsewhere.
All this make up an incredulous, gargantuan piece of risk for China. Even so, the internal circular is astonishingly bare in not highlighting those risks which are overdosed with the criminal. This suggests it was prepared and issued long before the US filed suit on July 20.
The internal quality and nature of the circular is evidenced by the writing: it uses hanyu pinyin — meaning, it was meant for circulation in Beijing, in the Mainland — as opposed to the traditional Chinese form used in Hong Kong where CCCC is listed on the stock exchange. Then again, there is no report yet to the HK Stock Exchange of the rail contract as amended with the 1MDB inclusion.
CCCC would violate disclosure rules (and their directors go to jail) if they withhold a full submission to the Exchange or should the company deliberately conceal pertinent facts, especially one of this financial scale with its vast legal, criminal and international implications. There is yet another legal inference: adding the 1MDB part, CCCC is dealing with fraudsters wanted in many places and the Malaysian company is itself a thief, not to mention Putra Perdana and Loh & Loh. The IPIC episode is evidence to that thievery.
Let China stew on this a while — there is still 10 days to signing — and if they do, then all previous deals with 1MDB, including the one with Edra, MYR10 bn worth, could begin to unravel. They have been issued fair warning by us, at shuzheng, not once but twice so far. Which is, don’t deal with Najib Razak; the man is a fraudster.
Summary of Deal
China’s obligations, above and below.
Note the above term ‘Assets received…’. Whoever prepared that is so badly misinformed, the person needs to be sacked. Outside the Ayer Hitam land, two items totaling USD2.5 bn are, worse than liabilities, fraudulent. Brazen Sky is under investigation in Singapore, the US and Switzerland; its ‘fund units’ a piece of fraud. The fourth item, 1MDB Energy, is an empty shell, without even a toilet bowl to its name other than USD6.5 bn in US bond debts, 3.5bn shared with IPIC, 3bn shared with MoF Najib. Are these documents even genuine?
On Clare Brown & Sarawak Report.
Vindicated by the US legal actions against 1MDB, Clare Brown’s ‘I-told-you-so’ arrogance, like Petra Kamarudin’s, is spilling into her Sarawak Report pages. As a result, and like Petra, she has combined the superlative with the baggage of her gweilo morality, mixing terms like ‘secret deal’ (CCCC is a HK listed company) with ‘outrage’ and ‘cunning’. Exclusive becomes ‘Shock Exclusive’. Her sensationalism jeopardizes the objective, which is simply to expose the hidden hands among the nefarious. That should be good enough. Otherwise, she might even begin to get slipshod over the documents received and her reports will begin to read like Utusan’s, propaganda. Malaysia has had enough of that.
SHOCK EXCLUSIVE: OUTRAGE!
Najib’s Secret Deal With China
To Pay Off 1MDB Debts
Marked “For Internal Use Only” an Appendix to a Term Sheet due to be approved by the Malaysian Cabinet today (27th July) lays out in detailed figures how Najib plans for over US$7 billion in accumulated 1MDB/Jho Low company debts to be wiped out by taxpayers in a secret deal between his Ministry of Finance and the Chinese state company CCCC (China Communications Construction Company).
The PM’s ‘cunning plan’ is to get the Malaysian Government to agree to inflate the actual cost of the East Coast Rail Project from only RM30 billion to RM60 billion, all to be borrowed from the Chinese Government, in order to disguise the payment of 1MDB’s (and Jho Low’s) company debts!
A whistleblower, who has supplied full details of the project, described the plan to Sarawak Report:
“The Malaysian Government is planning to award an overvalued project to launder money in order to fill the loophole of 1MDB.
The plan is to award the East Coast Rail Project to a Chinese Company, China Communication Construction Company Limited (CCCC). The initial budget for the project is MYR 30b, but they have overvalued the project for another MYR 30b, making it MYR 60b. The extra MYR 30b will be use to launder out cash to 1MDB related companies.
The project has been proposed to the cabinet on 25/7/2016 and will be approved by the cabinet on 27/7/2016 with total value of MYR 60b.
The Chinese company, which is backed by the China Government, will help pay off the 1MDB dept in advance and progressively. In return, this Chinese company will be rewarded with high profits and land, and of course extra influence with the Malaysian government”.
Doubling the cost of mega-project
The outrageous plan is blatantly laid out in the term sheet and internal report, which have been leaked to Sarawak Report.
The report says baldly that the actual cost of building the railway, has only been estimated by CCCC at RM27 billion. However, there is to be a so-called “Additional Differential” cost of RM29.85 billion, which will more than double the cost to make a total bill of RM60 billion, including a fat percentage of profit for the company (handily based on the total and not just the construction costs):
The company makes no bones about the incentives provided by the Malaysian Government in this “Direct Contract”, meaning that there was no open tender to get the best deal for the project.
CCCC says it has been given land on generous terms, including a chunk of land which was given cheap by Najib to 1MDB, then inflated in value at Ayer Item – the land which is valued at US$1.3 billion will be offered to CCCC for US$850 million.
CCCC will also gets tax breaks including from GST for the next ten years. And then, as a Chinese State-owned company CCCC notes the benefit of the extended influence over Malaysia the project and the massive loan of the cash (at a generous 2% interest rate) will provide.
So much for Najib Razak’s much vaunted ‘inward investment’ plans from fellow Islamic countries and his stirring of hatred against the so-called ‘Chinese Tsunami’!
Sneaking 1MDB’s debts into the project
The quid pro quo for the Chinese partners in this lucrative deal is to assist in Najib’s corrupted exit strategy for getting shot of his multi-billion dollar debts at 1MDB at a total cost of US$5.63 billion!
The first priority being to get 1MDB off the hook over its outstanding payments to Abu Dhabi’s IPIC. In the first instance this will be achieved through the payment of the $850 million to 1MDB for the Ayer Item land, but after that the company will assume the repayment of the remaining debts for the disastrous ‘power purchase’ and ‘strategic partnership loans’ which lost billions (mainly stolen).
The Malaysian taxpayer will of course have to pay the whole lot back with interest over the next 7 years in payments, all planned to be disguised by the inflated Rail Project!
Laughably, this outlay is set to be disguised by a repayment in ‘assets’ valued to the same amount of US$5.63 billion. The assets concerned are largely duds – vaunted ‘liquid and cash assets’ tucked away by 1MDB in dodgy bank accounts, including the 1MDB Brazen Sky account at BSI (alleged worth $940 milllion) and also the supposed assets of 1MDB Global at BSI, (alleged worth US$1.56 billion).
Significantly, we note that the 1MDB Global money, which was raised through a Goldman Sachs loan, is now also described as ‘Units’, raising the probability that these are in fact worthless pieces of paper representing bogus investments, similar to the ‘Units’ in Brazen Sky, which would imply, that like the PetroSaudi funds, the billions raised by 1MDB Global have all been stolen:
List of Payments totals US$7.5 billion/ RM29.8 billion
Just last week the United States DOJ explained in searing detail how all that missing 1MDB money, which is now being sneaked onto the East Coast Rail tab, was stolen by Najib and his family and associates, including Jho Low and IPIC’s Khadem Al Qubaisi, to be spent on gambling, drinking, jets, yachts, record-breaking fine art purchases (in many cases depicting under-dressed female forms).
The report sheet in our possession lays out in precise detail what CCCC/The Chinese Government has agreed to funnel through the project, in order to get Najib off the hook on all his problems.
The astonishing list contained in an Appendix to the agreement is clearly costed and totals over US$7,5 billion. It includes writing off 1MDB’s debts to the Abu Dhabi sovereign wealth fund IPIC, which is currently suing 1MDB to the tune of US$6.5 billion over unpaid guarantees.
Bailing out Jho Low’s companies also!!
Significantly, the list also includes an agreement to buy out two Jho Low related companies, which have long been suspiciously associated with Najib’s record of personal plunder from 1MDB. These are Loh & Loh Corporation Berhad and Putrajaya Perdana Berhad, for which Jho Low and his partners will receive a healthy US$315 million:
Sarawak Report has long since exposed how Jho Low used 1MDB money, which was secretly channeled through a so-called Islamic loan agreement with the company PetroSaudi to ‘buy out’ the Sarawak UBG group in which he and Taib Mahmud held the major stakes.
The purported buyer was Javace Sdn Bhd, a supposed subsidiary of PetroSaudi International, Seychelles (a bogus subsidiary of PetroSaudi, whose Director was Tarek Obaid, also a director of PetroSaudi). However, secret transactions obtained by Sarawak Report showed that all the money in Javace was controlled by a company Panama Investment Manager, which was owned by Jho Low.
The two subsidiaries of UBG Putrajaya Perdana and Loh & Loh are still identified as crony companies controlled by Low and Putrajaya Perdana was identified by investigators as having played a key role in funnelling cash from 1MDB’s subsidiary SRC into Najib’s own personal accounts:
Plainly therefore, Najib hopes to use his over-reaching powers at the MOF/PM’s office to launder all his dirty linen through the same simple mega-project, courtesy of secret and politically motivated Chinese cooperation.
The agreement is due to be passed by Najib’s compliant cabinet….. about now!
Public estimate leaves out the 1MDB costs and commitments?
A huge sum of RM85 million is also put aside in the contract for a ‘nominated company’ to be awarded a “publicity” and “communications” and “strategic consultation” role on the project – no guesses that this will go to a crony outfit.
Finally, also attached to the papers is a totally conflicting set of calculations, which are not listed as being “only for internal consumption” and which appear to represent the public face of the planned deal. These consist of a broad-brush, ‘back of the envelope’ set of figures, which provide a broad estimate for the project at the fuller figure of RM60 billion.
In this list there is no mention of any of the costs due to be carried for 1MDB!