Friday, September 11, 2015


The latest unfolding development, in the never ending 1MDB narrative, are press reports that US$1.4 billion made by 1MDB to IPIC as a security deposit is not accounted for in the latter's books.

The Financial Times reported 1MDB's deposit "does not appear to be an obvious corresponding entry in Ipic’s published accounts for either year".

Here are the links to IPIC's  2012 and 2013 financial statements and below are screenshots, which I understand, may indicate that the deposit is indeed unaccounted for. 

Also, in both year end accounts, the Notes do not mention any prerequisite or conditional deposit other than the benefit deriving out of IPIC's guarantee.

As always, 1MDB was swift to respond that "it stands by it's audited accounts".

I won't comment on 1MDB's lack of understanding of the undercurrent meanings that can be arrived from the missing deposit reports but will comment on the significant impact it will have on accounting firm Deloitte.

1MDB in no uncertain terms has specifically stated that its "auditors, Deloitte, made specific and detailed enquiries on these payments prior to signing off on the 1MDB audited accounts".

If these reports, of 1MDB's unaccounted deposit, are accurate and should the IPIC scrutiny of its accounts confirm that that it is indeed the case, it will be huge blow to the reputation of the accounting firm Deloitte

Tuesday, June 23, 2015


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

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

Thursday, June 18, 2015


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?