Wednesday, July 1, 2015

1MDB JUSTO RECAP PETROSAUDI'S JV CO ASSETS

After the much publicised arrest of former employee (head of IT says NST) of PetroSaudi, Justo Xavier, brouhaha had simmered down, the all encompassing charge of forgery and tampering of confidential PetroSaudi e-mails has since become the silver bullet for 1MDB's debt woes.

For what its worth, here are some screenshots of Justo Xavier's relationship with famous owner of PetroSaudi, Tarek A E Obaid.

1. Justo Xavier as Director of Almamlaka Limited, link here
.
















2. From link above, clicking Almamlaka Limited or link here,  you find














What you see is what you get. Justo Xavier, Director and Tarek A E Obaid, Shareholder.

As I said for what its worth.

And speaking of "what its worth", I had posted about PetroSaudi's dubious "assets" in Turkmenistan.

Justo recap 1MDB's Arul Kanda's press statement,
PetroSaudi, via a subsidiary company, owned assets, comprising rights to oil fields in Turkmenistan and Argentina, worth approximately USD2.7 billion. These assets were sold by PetroSaudi to another subsidiary, “JV Co”, which at the time of the asset sale, was a company formed by and initially 100% owned by PetroSaudi for the purposes of a proposed joint venture with 1MDB.  
In return for the USD2.7 billion asset transfer, JV Co had to pay PetroSaudi USD700 million. This indebtedness resulted from the asset transfer. Accordingly, there was no loan made or “to settle”.
Lets now take a trip to Argentina the for the so-called "owned assets, comprising rights to oil fields in Turkmenistan and Argentina, worth approximately USD2.7 billion. "

Searching from 2007-2009, the earliest mention of PetroSaudi's involvement in Argentina is this, "PetroSaudi plans investment with Patagonia, Andes Energia" dated February 26, 2008 and quote the article,
"Saudi Arabian private oil company PetroSaudi plans to invest up to US$94.5mn in seven E&P licenses in Argentina held by UK oil companies Patagonia Oil & Gas and Andes Energia (LSE: AEN), according to an Andes Energia statement. 
The cash injection will aid the development of the seven blocks in which Andes Energia has a 20% carried, 3% working and 20% royalty interest."
and
PETROSAUDI 
Founded in 1995, PetroSaudi is a private Saudi Arabian oil company not affiliated with the Saudi government, PetroSaudi co-founder Tarek Obaid told BNamericas. 
Saudi prince Turki bin Abdullah bin Abdulaziz Al Saud is the second co-founder of the company, according to PetroSaudi's website. 
"We found Latin America to be a very exciting place and have great relationships there on the ground," Obaid said. "We decided to go forward with a serious investment in that part of the world." 
"Technically speaking, we will become a very large company in terms of acreage in Argentina," he added. 
The company, for instance, is involved with US energy holding company AEI (formally known as Ashmore Energy International) in the purchase of a 10% stake in Argentine oil company YPF, Obaid said. 
The company also is in the process of purchasing stakes in Paraguay with CDS Oil & Gas. "We're going to be putting a lot of assets there to grow that company," Obaid added. 
The seven fields PetroSaudi will invest in with Patagonia are not new discoveries, but were abandoned because of the low price of oil in previous years. 
"Now with high oil prices, those fields have become a profitable opportunity," Obaid continued. "There's a lot of oil down there."
"We've bought into four of five producing assets in Argentina, and were producing around 50,000b/d in Argentina," Obaid said. 
PetroSaudi will most likely end up with interests in 37 fields in Argentina, he added
An investment of US$94 million and some clever word play, "involved with US energy holding company AEI (formally known as Ashmore Energy International) in the purchase of a 10% stake in Argentine oil company YPF", that's about it.

Search for "PetroSaudi" or "Petro Saudi" at the AEI website and YPF website will get you, nothing.

Even the US94 million investment has that familiar ring in Andes Energia PLC Annual report 2007,
In February 2008, we received notification that Patagonia, our consortium partner in certain oil and gas interests, had entered into a funding agreement with PetroSaudi, which could provide funding up to US$95.4 million. PetroSaudi has agreed to invest US$39.5 million in the first year of the agreement with an option to invest an additional US$55 million in the second and third years.
Since that's all that could be found about PetroSaudi's involvement in Argentina, I cannot say whether PetroSaudi had exercised its option for a total of US$95.4 million, failing which its investment would only be US$39.5 million.

Or Patagonia paying PetroSaudi to extinguish the option.

Be that as it may, its only US$ millions NOT US$ billions or approximately USD2.7 billion, to be exact for crying out loud.

So lets be clear on this, that's about all PtroSaudi is known to have invested in Argentina, no such rights to oilfields in Argentina or Turkmenistan.

But to be fair to PetroSaudi, its true that the company did purchase a stake in CDS Oil and Gas in Paraguay. 

From this article in Nov 25, 2008 ,"Saudi Backing Gives CDS Oil & Gas New Momentum In Paraguay" just ten months after, which nothing else could be found about PetroSaudi's Argentinian connection other than that is mentioned above, it quotes,
PetroSaudi, through Patagonia Oil & Gas, already has a large exploration presence in Argentina and is negotiating for acreage in Brazil. Now it is looking to add Paraguay to the mix.
Remember, at the very most, only a US$95.4 million investment in Argentina. And add to Paraguay it did. The article had this in its opening,
Investors in CDS Oil & Gas, which has struggled in recent years to make headway with the exploration of its frontier acreage in Paraguay, are hoping there will now be some real advances after the AIM firm’s Saudi shareholders upped their stake in the company to 62.8 per cent and undertook some high level discussions with leading Paraguayan politicians, including the President Fernando Lugo
But here is another familiar ring, when "CDS, PetroSaudi Visit Paraguay for Hydrocarbon Investment Pow-Wow" in October 13, 2008,
Representatives of CDS together with members of PetroSaudi International, including Tarek Obaid (CEO and partner with the PetroSaudi Chairman, Prince Turki bin Abdullah bin Abdulaziz Al Saud), met with President Fernando Lugo, the Minister of Foreign Affairs, Alejandro Hamed Franco, and Minister of Finance, Dionisio Borda, to discuss ongoing and future investments in hydrocarbon exploration in Paraguay. 
They also discussed extending and improving the relationship between the Kingdom of Saudi Arabia and the Republic of Paraguay, in the form of bilateral trade, and increased export.
Bloomberg also reported the above here.

I don't know about you readers but it somehow does sound familiar to me. 

Justo recap, this is Paraguay NOT Argentina.

Justo mention also, with a prayer that the same fate does not befall 1MDB, Bloomberg has this to say about CDS or the CDS Oil & Gas Group Plc, link here.
CDS Oil and Gas Group Plc engages in the exploration and development of oil and gas properties primarily in Paraguay. The company holds contractual rights in respect of three blocks of property covering 2.9 million hectares in the Chaco region of Paraguay. Its portfolio includes the Gabino Mendoza block covering an area of approximately 40,000 hectares; the PG & E block covering an area of 491,077 hectares; and the Boqueron block with an area of 800,000 hectares. The company was founded in 2003 and is based in London, United Kingdom. CDS Oil & Gas Group Plc is a former subsidiary of PetroSaudi International Ltd. CDS Oil & Gas Group Plc is in liquidation.
Justo recap, PetroSaudi's  so-called assets in the JV Co, there's no such oil rights worth US$2.7 billion, neither in Turkmenistan or Argentina.

And tampered or forged e-mails will not alter the fact that 1MDB had not made a thorough due diligence check to ascertain the authenticity of these so-called assets.

Show us the documents of the "independent valuation" of these so-called assets or as the saying goes, SHOW US THE MONEY.

Tuesday, June 23, 2015

1MDB DEBT SETTLEMENT ARRANGEMENTS WITH IPIC FOR US 1 BILLION RESCUE?

Recent flashback "US1b payment from IPIC is not a loan or bail out: 1MDB" NST 31 May 2015
 “That is absolutely not the case. This is a business transaction; not a loan, not any kind of debt and not a bail out
“It is an initial payment as part of a broader agreement to comprehensively address the various financial asset and liability transactions between IPIC, Aabar and 1MDB, further details of which will be announced in due course,” 1MDB President/Group Executive Director Arul Kanda in a statement today.
Just sighted this,
1MDB Debt Settlement Arrangements

On 28 May 2015, International Petroleum Investment Company (IPIC), Aabar Investments PJS (Aabar), Minister of Finance, Inc., Malaysia (MOF) and 1Malaysia Development Berhad (1MDB) entered into a binding term sheet that provides for the following principal matters:

·    on 4 June 2015, IPIC provided US$1 billion to 1MDB for 1MDB to utilise immediately to settle certain of its liabilities (the Cash Payment);

·    from 4 June 2015, IPIC has assumed the obligations to pay (on an interim basis) all interest due under two IPIC guaranteed 1MDB financings amounting to US$3.5 billion in aggregate principal amount (the Notes);

·    upon the completion of the transfer of assets as described below, IPIC will directly assume liability for all payment obligations under the Notes (the Assumption of Debt) and forgive certain financial obligations of the 1MDB Group to the IPIC Group (the Debt Forgiveness); and

·    by 30 June 2016, IPIC is to have received a transfer of assets with an aggregate value of an amount which represents the sum of the Cash Payment, the Assumption of Debt and the Debt Forgiveness.

1MDB and MOF have agreed to perform the obligations contemplated in the binding term sheet and to indemnify IPIC and Aabar for any non-performance, and vice versa.

IPIC has met the Cash Payment and will meet the interim interest payments under the Notes from existing liquidity available to IPIC.


This information is provided by RNS
The company news service from the London Stock Exchange
Link here.

Screenshots:




This information is provided by RNS
The company news service from the London Stock Exchange


FE TRUSTNET? Link here.
what is FE Trustnet?
FE Trustnet was formed in December 1995 and in October 2002 was acquired by Financial Express (Holdings) UK (Limited). FE specialises in the collection, validation and distribution of fund and equity prices, and factsheet information, and is the main supplier of data to the UK financial sector (www.financialexpress.net). 
Our service is aimed at private investors and Independent Financial Advisers and covers UK collective investment funds. All information is intended to be entirely factual and unbiased.
Screenshots:

From London Stock Exchange below.


Go to RNS link here and search "IPIC". Click "1MDB Debt Settlement Arrangements" from search window which links here.


 "This is a business transaction; not a loannot any kind of debt and not a bail out."

 "by 30 June 2016, IPIC is to have received a transfer of assets with an aggregate value of an amount which represents the sum of the Cash Payment, the Assumption of Debt and the Debt Forgiveness."

Loan a definite yes, kind of debt maybe not now, bailout a definite yes.

Are the above authentic? Are the debt settlement arrangements True or False?
  
Post Scriptum

The very next day of the debt settlement arrangement,
“On 29 May 2015, the Ministry of Finance announced 1MDB’s plan to repay a US$975 million (RM3.6 billion) loan to a syndicate of international banks. 
“Today, we are pleased to confirm that the loan has been fully repaid. This RM3.6 billion repayment reflects 1MDB’s commitment to reducing its debt levels, in line with the rationalisation plan approved by Cabinet,” 1MDB president Arul Kanda said in a statement today - MalayMail Online 8 June 2015

Sunday, June 21, 2015

1MDB THE RAHMAN PROPHECY AND THE LAST BARISAN NASIONAL PRIME MINISTER

Its a slow and hot day today and this came to mind - the R.A.H.M.A.N prophecy.

Datuk Seri Najib, embroiled deep inside the 1MDB fiasco, resulting in other GLCs like Tabung Haji, Exim Bank and now Tenaga Nasional becoming directly involved in the whole sordid affair, will this be the fulfilment of the prophecy? 

And become the last Barisan Nasional Prime Minister?

With uncanny accuracy, the alphabets which is the acronym of the name of our Father of Independence or Bapa Merdeka - Tunku Abdul Rahman, are the first alphabet of the names of all Prime Ministers ever since.

R - Rahman (Tunku)












A - Abdul Razak













       H - Hussein Onn










       M - Mahathir Mohamad









                   A - Abdullah Badawi












      N - Najib Razak.











Would it also mean the end of the Barisan Nasional the successor of the Alliance party, an enlarged party with major opposition parties PAS, Gerakan and PPP becoming members and has governed the country uninterruptedly since Independence? 

Ironically if it were to come to pass, the Barisan Nasional was the brainchild and formed by Datuk Seri Najib's father, the late Tun Abdul Razak.

Saturday, June 20, 2015

1MDB ARUL KANDA CONFIRMS MONEY LOST

Thank you Arul Kanda. 

Your press releases are surely albeit slowly confirming  money being lost, not bit by bit but chunk by chunks.

Despite your best efforts, with play of words both to deceive and minimise the enormity of the loss, these are the facts according to your good self.

The first chunk lost, the 1MDB-Petrosaudi JV: RM2,396,170,000 or RM2.396 billion.

See how big this USD700 million sum looks in Ringgit Malaysia? 

(Click image for exchange rate in 2009)


You said it, here
PetroSaudi, via a subsidiary company, owned assets, comprising rights to oil fields in Turkmenistan and Argentina, worth approximately USD2.7 billion. These assets were sold by PetroSaudi to another subsidiary, “JV Co”, which at the time of the asset sale, was a company formed by and initially 100% owned by PetroSaudi for the purposes of a proposed joint venture with 1MDB. 
In return for the USD2.7 billion asset transfer, JV Co had to pay PetroSaudi USD700 million. This indebtedness resulted from the asset transfer. Accordingly, there was no loan made or “to settle”.
PetroSaudi owned the assets thus, "PetroSaudi, via a subsidiary company, owned asset". And the assets were "sold" to another company, JV Co, which is 100% owned by PetroSaudi. 

The bottom line is, PetroSaudi "sold" assets to itself thus, "PetroSaudivia a subsidiary companyowned assets" "These assets were "sold" by PetroSaudi to another subsidiary, “JV Co”, which at the time of the asset sale, was a company formed by and initially 100% owned by PetroSaudi.."


Now why would PetroSaudi, if it meant for its assets to be part of its share in the JV with 1MDB, "sell" instead of just transferring the assets to JV Co?

To make the RM2,396,170,000 or RM2.396 billion, you dumb clot.

Because you said it not once but twice,
In return for the USD2.7 billion asset transfer, JV Co had to pay PetroSaudi USD700 million. This indebtedness resulted from the asset transfer. Accordingly, there was no loan made or “to settle”.
Transfer not "sale" and your slip is showing, pun intended.

And you repeated it again,
"It was part of the joint-venture agreement that, of the USD1 billion from 1MDB, USD700 million would be used to pay PetroSaudi for the initial asset transfer to JV Co (see above) whereas USD300 million would remain in JV Co."

"of the USD1 billion from 1MDB, USD700 million would be used to pay PetroSaudi for the initial asset transfer..." 

or in my take

"of the RM3,421,000,000 from 1MDB, RM2,396,170,000 to pay PetroSaudi for an asset transfer."

See how enormous the sum lost looks now and those dumb folks at 1MDB agreed to this arrangement?

 A large chunk of RM2,396,170,000 lost.

Yeah, yeah Mr Arul I will not omit the "happy ending" for 1MDB in this whole charade. 1MDB made a whopping USD488 million. But wait a minute, did you say USD488 million?

Yes, Mr Kanda you said it,
Accordingly, 1MDB invested a total of USD1.83 billion with PetroSaudi (initially as equity, then as murabaha notes), and ultimately owned USD2.318 billion of fund units i.e. a gain over time of USD488 million.
Yes indeed, USD488 million of the infamous "units", now called "fund units".


No worries Arul, I won't mention your clever play with words in the context of the whopping gain statement above.

Lets go down memory lane, not so long ago Mr Arul and I will come back to your latest bluster which serves to confirm the humongous losses incurred by 1MDB.

The Star on 11 November 2014 had this a "Report details 1MDB’s power plant power purchase terms", here.

I will quote relevant portions from the above report detailing 1MDB's foray into the energy field of more losses.


Note that the reporters' opened the report with "1Malaysia Development Bhd’s (1MDB) latest annual report for the financial year ended March 31, 2014 has revealed.." and I take that to mean sighting the 1MDB annual report.

To fund the IPP purchases, 1MDB  had issued US$3.5billion debt papers in two tranches of US$1.75billion each and
 One of the tranches – 1MDB Energy Ltd – was arranged by Goldman Sachs, and according to a weekly, the fees incurred was RM627.84mil (US$196.2mil).
Since this post is about money lost, the above extract is just to illustrate the huge sums of ringgit 1MDB idiotically spent and in the following report, "US$700m? That’ll do nicely for Goldman" how 1MDB has the habit of enriching others. Quote,
"Alright, the US$700m figure might be on the high side. But when every moving part is taken into consideration it’s likely that Goldman made – or stands to make – hundreds of millions of dollars from the 1MDB trade, and I would guess closer to US$700m than US$600m"
The Star report has the lowdown on how IPIC, the "benevolent" USD1 bil Arab knight, came into the thick of things. It reported that Tanjong PLC did not trust 1MDB with a really dodgy excuse,
"IPIC came into the picture as the owner of the Tanjong power plant was not comfortable with guarantees from 1MDB, as it would have been perceived to be receiving favours from the Government. This is because 1MDB is wholly owned by the Federal Government."
And the story gets better and better,
"Subsequently, IPIC guaranteed the US-dollar debt papers to the tune of US$3.5bil (RM11.2bil) to facilitate 1MDB’s purchase of the power plants from Tanjong and Genting. 
In return for the corporate guarantee from IPIC, 1MDB had given a 10-year option to Aabar Investments PJS to acquire up to a 49% equity interest in the Tanjong and Genting power plants when the energy division goes for listing
 And 1MDB getting 1MDumB and 1MDumBer.
The annual report stated that 1MDB had taken a bridging loan facility worth US$250mil (RM836mil) in May this year and that the proceeds were used to extinguish the options granted to IPIC.
Another chunk of RM836,000,000 lost.

Recall the dodgy excuse that AK, Ananda Krishnan not Arul Kanda, owner of Tanjong PLC being uncomfortable because of a "favour perception" that led to IPIC guaranteeing the bond issue? As a condition for the IPIC guarantee, 1MDB had to make a security deposit of RM4,200,000,000 to Aabar, 98.253% owned by IPIC. Read here,
"A sum of 4.2 billion ringgit has been placed with Aabar Investments Deposits as security for a $3.5 billion bond issued by 1MDB in 2012"
What would it cost for a company to issue a guarantee? Frankly, I do not know. But if I were the boss, I would just instruct the finance dept or whatever dept to raise the letter, sign it and that's it.

But how much would 1MDB earn on a fixed deposit of RM4,200,000,000? At 2.5% per annum,, a staggering RM105,000,000 and now IPIC would be earning interest on the 1MDB deposit which probably cost them nothing.

Yeah yeah, the risks IPIC is taking. Other than the fact that the bonds had 10 years maturity, and as we have seen, 1MDB will 'kow tim' that when the bonds become due for redemption.
DEFINITION of 'Redemption' The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units in a mutual fund. A redemption occurs, in a fixed income security at par or at a premium price, upon maturity or cancellation by the issuer.
Redemption Definition | Investopedia
www.investopedia.com/terms/r/redemption.asp
Well, 1MDB has the habit of enriching others.

It came to pass that the loan facility worth US$250mil (RM836mil) could not be paid by the dumb 1MDB!

The Star and Sundaily both advancing a Singapore Business Times report, "Deutsche-led group in talks over US$975m 1MDB debt",


"It reported that the banks and 1MDB are currently in "intense negotiations" to prevent a recall of the loan that was taken 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" - Sundaily 
"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" - Star 
Enter, the "benevolent" USD1 bil Arab knight. Yes indeed, the same IPIC who earlier took and "gave" back.

See how smart these Arab businessmen are? Read on, "1MDB of Malaysia’s $1.75bn bond: one puzzle wrapped up in another"
"Yet the pricing of the deal is not its biggest mystery. Bankers are wondering why an Abu Dhabi government investment fund would guarantee what is essentially Malaysian sovereign debt. After all, 1MDB has secured a Malaysian state guarantee in the past. Why is a Gulf emirate, many miles away, guaranteeing this bond?"
Why? Because those running 1MDB are real dumb jerks.

With the entrance and in the same report of the benevolent Arab knight, we now come to you, Mr Kanda,
"The US$975mil loan was secured with 1MDB’s wholly owned Brazen Sky’s US$1.103bil"
You do remember Brazen Sky don't you Mr Arul Kanda? Yes, you do. You yourself said it,
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.
But you have conveniently forgotten to explain how the cash became assets, then became units and now metamorphosing into fund units. 

Conveniently forgotten to mention, that the documents pertaining to these not so fund units were suspect.

Which was the catalyst for Deutsche Bank to recall the loan and the Arab knight "saving" the day to avoid cascading defaults of loans, I mean debts, incurred by the dumb 1MDB.

Hello Brudder, remember or  not? You can read it here Brudder, "German banks seek early repayment of 1MDB loan, could trigger default on RM42b debt"


More worrying for the state-owned investor is that the consortium led by the Deutsche Bank Singapore could trigger cascading defaults on the remainder of 1MDB’s reported RM42 billion in debt if they declare the firm to be delinquent. 
The consortium’s fears are said to be prompted by “incomplete” documents that 1MDB provided as a form of security, rendering the terms of the loan unmet. This alleged breach allows the banks to rescind the loan ahead of the August due date. 
The loan was secured via the US$1.103 billion that 1MDB said was being held by its Brazen Sky unit in BSI Singapore, originally from a tranche of offshore deposits it previously kept in the Cayman Islands.
Well, I too apologise to readers because the gist of this post is, Mr Arul Kanda, your confirming huge sums of money lost but instead seem to have deviated.

Yes, my post has deviated.

 Just to prove that you are a dumb clod yourself.

Thursday, June 18, 2015

1MDB TURKMENISTAN FACT OR FANCY

PetroSaudi, via a subsidiary company, owned assets, comprising rights to oil fields in Turkmenistan and Argentina, worth approximately USD2.7 billion. These assets were sold by PetroSaudi to another subsidiary, “JV Co”, which at the time of the asset sale, was a company formed by and initially 100% owned by PetroSaudi for the purposes of a proposed joint venture with 1MDB. 
On 29 September 2009, 1MDB executed a joint-venture agreement with PetroSaudi.  

What exactly does  "rights to oil fields" mean? 

It is Production Sharing Agreements (PSA) that has true value.

I have searched and never found any  reference to Petrosaudi having any interest in the oil and gas industry of Turkmenistan or vice versa.

The US-Turkmenistan Business Council is a Washington, DC based non-profit organization that promotes commercial relations between the United States and Turkmenistan. A publication dated 3/10/2009 here does not mention any Saudi based company, onshore or offshore.

In fact Petronas is mentioned having a Production Sharing Agreement (PSA), 
The remaining three PSAs are offshore operations, including the Cheleken project operated by Dragon Oil of the United Arab Emirates, the Block-1 project operated by Petronas of Malaysia and the Blocks 11, 12 project operated jointly by Maersk Oil of Denmark and Wintershall of Germany.
More shockingly Petronas had signed a 25-year Production Sharing Agreement way back in 1996! with emphasis as "the first PSA to be awarded by the government of Turkmenistan" here,
In July 1996, Petronas and the government of Turkmenistan signed a 25-year Production Sharing Agreement for the exploration, development and production of offshore Block 1, including the Garagel-Deniz (Gubkin), Deyarbekir (Barinov) and Magtymguly (East Livanov) fields.[i] Block 1 is located approximately 80 km southwest of Turkmenbashi.[ii] This was the first PSA to be awarded by the government of Turkmenistan. That same year, the government of Turkmenistan announced that Petronas planned to invest more than $210 million in its operations.[iii]
Why would or rather why should 1MDB be a party in a joint-venture with Petrosaudi, whose presence in Turkmenistan is doubtful and which Petronas had already made inroads 13 years before?

U.S. Department of State in its Executive Summary on Turkmenistan in 2014 here (Note: the US-Turkmenistan Business Council publication above must have been the U.S. Dept of State Executive Summary 2009)  also does not mention any Petrosaudi presence.

By 2014, the offshore PSA had increased to six with Petronas still in the mix,
In addition, there are six PSAs for offshore operations: Block I operated by Petronas of Malaysia; Block II (Cheleken Contractual Territory) operated by Dragon Oil (UAE); Block III operated by Buried Hill (Canada); Blocks 11 and 12 operated jointly by Maersk Oil of Denmark and Wintershall of Germany; Block 23 operated by RWE of Germany; and Block 21 operated by Itera of Russia.
And still no mention of Petrosaudi or Saudi presence.

So what Petrosaudi "rights to oil fields" in Turkmenistan is 1MDB crowing about that is worth USD2.7 billion (together with Argentina) when it seems to be non-existent?

Monday, June 15, 2015

1MDB RM6 BILLION INHERITED DEBT?

Arul Kanda's Press Statement
RM42 Billion All Accounted For 
“In recent weeks, there has been much speculation about the use of RM 42 billion of debt raised by 1MDB, and more specifically that RM 27 billion of debt proceeds are alleged to be "lost" or "missing". We provide a summary of what the RM42 billion debt has been used for, information that is fully disclosed in 1MDB's audited and publicly available accounts from 31 March 2010 to 31 March 2014. We trust this clarification will help to clear any confusion on this matter.”- Arul Kanda, President and Group Executive Director



Firstly, total expenditure does not equal total debt.

Subject of this post from Arul's graphic statement above is the "Inherited debt of RM6 Billion" which is a mystery to me.

From the Genting Berhad's announcement of its IPP sale, except for inter-company advances, 1MDB did not assume any liability.

In the two years preceding Tanjong PLC's divestment of its energy operations, from the 2010 Annual Report Group Balance Sheet, there are borrowings close to RM6 billion. However, the Balance Sheet shows a healthy net asset and shareholders equity of RM4.28 billion.

Unless after going private further borrowings had been incurred, there is no way that 1MDB would had inherited any debt from the Tanjong PLC IPP purchase.

It is unlikely. Not only was said balance sheet healthy, the energy operations contributed RM1.006 billion or 82% operating profit to the group for a net profit of RM749 million at the time.

As for the Jimah purchase, it was a 75% stake and at half the purchase price of Genting with strong cash flows, there could hardly be any debt owed to the tune of RM6 billion.

So, with a layman's understanding, its puzzling to me how and where 1MDB the RM6 billion 
inherited debt arose and came from.

Saturday, June 13, 2015

1MDB DATO SERI NAJIB'S FQA (FREQUENTLY QUESTIONED ANSWERS)

PRELUDE

Its not that I love PM Dato Seri Najib less but I love Malaysia and BN more. 

It would also be the same for beloved Tun Mahathir should it comes to pass, where and when a situation arises and the nation's future is in jeopardy thru his actions,  I will discard all my respect and admiration for the grand old man. Because, I love Malaysia more.

As far as I am concerned, the Tun has never disappointed and did everything for the good of the country, period.

I am from a generation during his administration and all the so called financial "scandals"  as time goes on have only vindicated him.

I shall name the two biggest - BMF and BNM forex loss.  In both cases Tun Mahathir's role have become almost nonexistent. BMF here and Forex loss here.

As regards to the forex loss, quote
"He had tacitly advocated that the central bank manage forex reserves in a more aggressive manner. Bank Negara took positions in the forex market and lost badly in 1993. Its governor then, Datuk Jaffar Hussein, and the head of forex trading, Nor Mohamed Yakcop (now Tan Sri and Finance Minister II), resigned in the wake of the scandal."
If Tun was responsible, there would have been no reason for those persons to resign.

Reason and loss? Rm5.7 billion here.



Some related reading to the above article.

ON WITH THE SHOW

Staronline reported today, ‘Dr M seeks to topple serving PM’




DSN's retorts as reported verbatim and my questions.

Najib said the criticisms from Dr Mahathir came about because the former prime minister wanted him to resign when “I refused to implement his personal demands”.

Q: What are Tun's personal demands?

He said it was his duty as a democratically elected prime minister to lead this country and “do what I believe is right for the entire nation, not one man”.

Q: Does the nation believe things are not being done right and not only one man?

“I do not believe the people want a former prime minister to rule by proxy,” Najib wrote in his posting on najibrazak.com yesterday.

Q: Was another former PM ruled by proxy then?

Najib said Dr Mahathir’s claim that RM42bil was missing from 1MDB and that the company’s financial assets were “worthless” had created a crisis and raised unnecessary panic.

Q: Crisis and panic among whom?

“Had Tun stuck to the facts and made clear that the RM42bil is in fact debt, then it would be a different story,” he said.

Q: Isn't a debt still a debt? Is this an admission that RM42bil is clearly the debt?

“This is because a company generally has to have assets of a higher value to provide collateral against its debts.

Q: Is this an expert opinion?

In the case of 1MDB, the RM42bil debt is backed by RM51bil assets as at the 2014 financial closing. But he chooses to ignore this.”

Q: Is this affirmation of the fact that 1MDB's total debt is RM42bil? Just what are the assets and how are the assets evaluated?

He said it was wrong for Dr Mahathir to allege that RM42bil, which he later changed to RM27bil, was “missing”.

“After 1MDB disclosed the whereabouts of the RM42bil, Tun then said some billions were lost.

Q: So now RM42bil is no longer a debt and some where whereabouts out there? Can it be confirmed as a fact that some billions were not lost?

“This shifting of numbers and arguments casts serious doubt on his claims,” he said

Q: Since RM42bil had been earlier ascertained as debt, is this also shifting and what are the answers to Tun's other claims?

He also said that market and public sentiment had been negatively influenced by Dr Mahathir as he was a former head of government.

Q: Since that is the case wouldn't expeditious, concise and precise answers calm market and public sentiment?

“His attacks in reality are not motivated by 1MDB. He is just using the company as an excuse to try and topple a serving Prime Minister.

Q: Is this the first time a serving PM has been toppled? And who and what supported Tun in toppling the other serving PM?

“If 1MDB had never existed, he would find another reason,” Najib added.

Q: Nevertheless 1MDB does exist and is the reason and if 1MDB was in shipshape would Tun be able to topple another serving PM?

He explained that these public attacks would only harm Umno, the Government and ultimately Malaysia.

“He is now saying that Barisan Nasional will lose in the next general election, but since when did any one individual have the right to speak for the entire voting public?

Q: Is the Tun the only person saying that BN will lose in the next GE at the rate the 1MDB matters are going on? That too despite other matters that are affecting the rakyat?

“The Opposition is in chaos and, given their coalition’s fundamental ideological splits, there would be national paralysis if they assumed office,” said Najib.

No question spot on. Now that is the true and actual reason.

PS

Lim Kok Wing where are you?