"The fair value of these investments amounted to US$2.33 billion as at 31 March 2014. As at the date of this report, the Group had received redemptions amounting to US$1.22 billion with the remaining redemption amounts of US$1.23 billion (including a dividend of US$131.7 million), to be received before end of November 2014, as advised by the investment manager of the SPC."But US$1.22 billion + US$1.23 billion = US$2.45 billion NOT US$ 2.33 billion.
However, US$2.45 billion - US$131.7 million (dividend) = the magical number US$2.318 billion!
We'll come back to the magical number later on or some may have already seen a blip.
"As at the date of this report, the Group had received redemptions amounting to US$1.22 billion.."For the Record, on 23 December 2014 in a Statement by Tan Sri Dato Seri Lodin Wok Kamaruddin, Chairman of the Board of Directors, 1MDB said,
"However, the company has already redeemed a significant portion, US$1.4 billion, of the fund and expects to redeem the remaining amount in the coming months."Lodin Wok got it wrong? I believe so.
On 13 Jan 2015, the 1MDB Chairman's newly appointed CEO, Arul Kanda, announced the Final redemption of funds from Cayman Islands with the following numbers,
"Following a commitment made by the Chairman of the Board of Directors in a statement dated 23 December 2014, 1MDB can confirm that it has now redeemed in full the US$2.318 billion invested by the company in a Cayman Islands registered fund.
These funds originated from the repayment of a loan provided to PetroSaudi in 2011, in the form of Murabaha notes, following the termination of an earlier agreement to enter into a JV with the company. The notes, which were paid back in full - with interest, were subsequently invested in a fund under the regulatory supervision of the Cayman Monetary Authority.
1MDB had previously redeemed US$1.215 billion, representing 60% of the funds invested, and has now redeemed an additional US$1.103 billion, representing the remaining balance of the total US$2.318 billion that was originally invested.
1MDB hopes that the redemption of these funds, in full, draws a line under this matter.”No, Arul Kanda, did not lawan towkay. His "1MDB had previously redeemed US$1.215 billion" corresponds Deloitte's number rounded up, US$1,22 billion.
And the magical number, "1MDB can confirm that it has now redeemed in full the US$2.318 billion invested by the company"
Hello? Not a full redemption, the US$131.7 million dividend is missing! Lost in plain sight.
From the 1MDB Annual report extract, Deloitte in the second paragraph states,
As at the date of this report, the amounts received from the redemption of investments of US$1.22 billion in the SPC above have been substantially utilised for the purpose of debt interest payment, working capital and payments to Aabar as refundable deposits pursuant to a Settlement Agreement to extinguish the Options Agreements as disclosed in Note 41(ii)(j)Lets pause for a moment or you may seen another blip or two.
On 13 May 2015 when the Star, quoting from the Singapore Business Times, reported "Lenders led by Deutsche Bank seek early repayment from 1MDB: Report" with the final lines,
"The money from the US$975mil loan was used by 1MDB to pay Abu Dhabi’s International Petroleum Investment Company (IPIC) to terminate an option to subscribe for the future listing of 1MDB’s power asset, Edra Energy, the report said."Then on 16 June 2015, in and attempt to knock Tun Mahathir, 1MDB came out with their "Facts in relation to blog posting entitled “More Investments by 1MDB” by Tun Dr. Mahathir Mohamad", came out with,
"In September 2012, 1MDB sold its shares in PetroSaudi Oil Services Limited for USD2.318 billion and received fund units in a Cayman registered fund. The Cayman registered fund is managed by Bridge Partners, a Hong Kong-based fund manager. These fund units were owned by 1MDB via its 100% subsidiary, Brazen Sky, and held through BSI Bank Singapore as custodian"Summing up Deloitte's second para above of the first "redemption of investments of US$1.22 billion in the SPC above have been substantially utilised", juxtaposed to the Star report and 1MDB's facts, 3 questions arise.
- Were the "debt interest payment, working capital and payments to Aabar", as audited by Deloitte, paid in cash or "fund units"?
- If in cash, how and where was the cash repatriated to?
- If Deloitte stated that there was "payments to Aabar as refundable deposits pursuant to a Settlement Agreement to extinguish the Options Agreements", what was the US$975 million syndicated loan from Deutsche Bank for?
Then there is a not so small matter of the second redemption US$1.103 billion.
Whether the first redemption of US$1.215 billion was in cash or "fund units", alarm bells were ringing for the second.
Saving the worst for last, just before 1MDB's "facts"and after its near fatal cascading loan default fiasco, on 26 May 2015, the cash or "fund units" became a cause of serious doubt by its own custodian bank when "Bank Negara confirms told about 1MDB-BSI ‘cash’ issue by Singapore"
Bank Negara Malaysia (BNM) today confirmed receiving a report from its Singapore counterpart on a complaint lodged by BSI Bank about 1Malaysia Development Bhd’s (1MDB) account that the Swiss bank was handling.
BNM Governor Tan Sri Dr Zeti Akhtar Aziz said the Monetary Authority of Singapore (MAS) had furnished its report on its investigations into the account, which recently caused controversy here when it was revealed that the US$1.103 billion (RM3.985 billion) kept in it was in “units” and not cash as previously claimed.The final question is, how and when will these 1MDB "fund units" worth US$1.103 billion become hard cash and repatriated?
Even when it does happen, there is truly no redemption for 1MDB in this whole infamy.