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Saturday, 27 May 2017

Crocodile tears: Mahathir and Proton

1. Proton sales started to decline in the year 2003 while Tun Mahathir was still Prime Minister. Just two years later in 2005, it was overtaken by Perodua in the Malaysia market and overtaken by Honda in 2016.
 
Exports sales to UK and Singapore have now dropped to zero.

In Australia, from Jan to April 2017, Proton only managed to sell 11 cars.


2. Lotus Cars have lost money every single year since Proton bought the company in 1996 - losing a total of an estimated RM6 billion over the past 20 years and RM920 million in 2013 alone.
 

3. Tun Mahathir had asked Volkswagen to take a 50% stake in Proton in the year 2005 but the deal did not happen. Later, Tun Mahathir asked the government to sell all of Proton to DRB-Hicom in 2011.
 
4. Since DRB-Hicom fully took over in 2012, Proton have lost RM4 billion. In the year 2016 alone, Proton lost RM1.4 billion. Proon had also dragged the parent DRB-Hicom group into losses - putting 100,000 jobs at risk.

Proton was threatening to bring down the entire DRB-Hicom groups that was very diversified and includes airports, ports, construction, power, logistics etc - along with its 60,000 jobs.

You can see this clearly from the Group's earnings since they completed the purchase of Proton in 2012.
 
 


5. The heavy losses and lack of cash in Proton also caused payments to Proton suppliers and vendors to be unpaid - putting another 40,000 jobs at risk.

Mahathir's son, Mokhzani Mahathir owns the official distributor of Porsche cars in Malaysia and has a long involvement in the local Auto Industry. The situation is so bad that Mokhzani, who had a fortune of RM4.22 billion in the year 2014 and is the second richest Malay tycoon, did not dare to pay the RM1.1 billion to buy up DRB-Hicom's stake to help save Proton

6. Due to the big amount of jobs at risk, the govt had no choice but to give RM1.5 billion in soft loans to Proton in early 2016 which Proton immediately used up to clear off all its debt to its suppliers and vendors. In late 2016, the govt was also forced to give another RM1.7 billion in credit line to Proton to enable it to continue operating.

7. The total assistance given by Govt to Proton in 2016 alone is RM3.2 billion -  This is more than half of the RM5.9 billion that the govt paid in BR1M to 4.7 million households and 2.7 million single individuals for the year 2016.

This would be on top of the RM14 billion assistance that the govt had given Proton since it was founded.

8. After being made Chairman of Proton in Jan 2014, it was Mahathir and Tan Sri Syed Mokhtar who traveled to China in April 2014 to invite Geely to help save Proton. It was Mahathir who first approached Geely for help.



The Govt no longer owns Proton. The sale to Geely was DRB Hicom's decision - not the govt.

As pointed out earlier, it was Mahathir who had asked Govt to sell its stake in Proton to DRB Hicom, a private company, which then sold a stake to Geely.

Therefore, it is strange for Mahathir to suddenly criticize the sale of a stake in Proton to China's Geely and claim he is crying since it was Mahathir who first said that Proton should sell a stake to Germany's Volkswagen in 2005, it was Mahathir who asked Government to sell all its stake in Proton to a private company in 2011 and it was Mahathir who first approached Geely in China in 2014 to ask it to help save Proton.

In fact, just 3 months ago in February 2017, Mahathir said he has no objection with Geely buying a stake in Proton. Suddenly, 3 months later he criticizes the government, blames Najib and he says he wants to cry because his "son" was sold?

Looks more like Mahathir was the one who sold his own son instead. Bapak jual anak!


Even though Mahathir was instrumental in the govt selling off Proton to private companies and in getting Geely to be interested in Proton, this has not stopped Mahathir from going all over Malaysia during the month of Ramadhan to slander and blame Prime Minister Najib over Proton's sale and make low-classed jokes about Najib's wife. This is from two days before Ramadhan started.

   

Of course, Mahathir supporters and fan-pages take their cue from his low-class jibes and proceeds to hit even lower lows with posts such as this - on the first day of Ramadhan too.



9. Proton continues to be 50.1% majority-owned by DRB-Hicom, a Malaysian company while Geely owns 49.9%. Geely has a good track-record. After buying 100% of Volvo from Sweden in 2010, Geely has helped make Volvo a success. Last year, Volvo sold the highest number of cars in its history - it's fourth straight years of record sales.

10. By partnering with Geely, Proton's survival is more assured. Instead of a market of just 30 million people in Malaysia, Proton can now access a market of 1.4 billion people in China.

It is better for Malaysia to own 50.1% of a company that has chance to survive and have a market of 1.43 billion people than to own 100% of a company that is on the verge of bankruptcy and losing billions of Ringgit every year in a market of just 30 million people.

Friday, 19 May 2017

The big TWIST: Parroting Guan Eng, a slap to Mahathir's face.

The "slapping" incident between Mat Over and David Teo has been a hot topic over the past two days.

Both Mat Over and David Teo had said they had lost their temper and acted badly. Both had publicly said that this issue is over for them and asked Malaysians to move on.
Movie producer David Teo and actor-comedian Sulaiman Yassin, who were involved in a scuffle at a National Transformation (TN50) dialogue session, say they are putting the ugly episode behind them and urged Malaysians to do the same. 
Teo, the Metrowealth Pictures chief executive officer, said that he has forgiven Sulaiman, who is better known as Mat Over, with an open heart. 
“I told the Prime Minister that I forgive him (Sulaiman) over the incident, when I shook the Prime Minister’s hands (on that night),” Teo said when contacted yesterday. 
Teo explained that he was talking to the moderator of the programme, actor-producer Datuk Rosyam Nor, before the scuffle happened. 
“It was not my intention to be rude to the Prime Minister. I just told Rosyam some of the participants were not given an equal chance (to talk). I had yet to talk to the Prime Minister so how could I be rude to the Prime Minister?” he asked. 
Sulaiman also expressed the intention to move on from what happened. 
“I was just unhappy because he did not respect the Prime Minister by raising his voice. Anyway, both of us apologised to one another in front of the Prime Minister, and I ask all Malaysians to move on from this chapter. 
“No one was injured during the incident, because he was not hit when I tried to slap him. I also did not kena (not injured) when he tried to kick me,” he said.

While any form of physical violence or attempt at violence should be condemned but the Pakatan politicians continue to make an issue out of a non-issue - twisting it beyond all recognition with their lying interpretation.

The first to start this was unsurprisingly, DAP Secretary-General Lim Guan Eng who said:
"What happened in front of the prime minister last night gave the impression that violence can be used on certain Malaysians," he added. 
Asked what he meant by "certain" Malaysians, Lim said this included minorities and opposition leaders or members who come from all races.

I don't know how he does it but Guan Eng is something special.

While most people would have seen it as two creative Malaysians getting emotional and behaving badly,  Guan Eng somehow manages to make this into a racial issue of a Malay bullying a Chinese or oppression on opposition leaders.

Everything he does seems reeked in racism and he sees racism in everything.

It has been said that the true racist is the one who can see racism where no one else can.

Salute and greatest respect to this fellow who can see and say something that no other politician or sane human being can.

Next to follow Guan Eng's line to twist the incident was Tun Mahathir who said:
Dr Mahathir Mohamad has used the incident where a movie producer was slapped in front of Prime Minister Najib Abdul Razak to illustrate how freedom of expression has been curbed. 
The former premier, who was known to have little tolerance for dissenting views during his tenure, alleged that those who ask Najib questions would end up in trouble. 
"This never happened during my time and the prime ministers before me. This only happens during Najib's era ... Those who speak end up in trouble. The newspapers are censored, so is TV3 and other (media). 
"So when given a chance to speak, they try (to air their views), and this is the consequence and result of such attempts to speak the truth. Ask questions also cannot, (you get) beaten,” he added.
So, Mahathir's twist is that this incident is proof that Najib is a dictator who does not allow anyone to ask questions.

Let's look at the video again (please watch properly) :


  
It is clear from the video that the moderator was looking for a Chinese Artist to give his views. The moderator could not see David Teo putting his hands up which caused David to come forward on his own.

The moderator then clearly gave David 1 minute to give his views in front of Prime Minister Najib but instead of giving his views, he launched an emotional outburst at the moderator yelling that the moderator is not fair and did not call on those seated at the back.

Seeing this yelling in front of the Prime Minister (as opposed to asking a question), Mat Over lost his temper and tried to slap David.

So, clearly Mahathir has twisted this beyond all recognition and lied (something he has done with increasing frequency since joining Pakatan) to say that David was not allowed to ask questions.

I repeated. David Teo was given the opportunity ask questions - which he didn't but used the opportunity to yell at the moderator instead.

Yes. Mahathir lied. Again.

Mahathir then said that no one was ever assaulted for going against him when he was Prime Minister.
 
Yes, no one was ever assaulted when Mahathir was PM. Anwar? Oh.. he hit himself or fell down.
Even MalaysiaKini was incredulous at his hypocrisy when they reported what Mahathir said that under Najib there is no Freedom of Speech unlike during Mahathir's time and inserted this sarcastic paragraph in their article:
The former premier, who was known to have little tolerance for dissenting views during his tenure, alleged that those who ask Najib questions would end up in trouble. 
If there was no Freedom of Speech under Najib's time then MalaysiaKini would not have existed nor would Mahathir have the chance to slander and lie about Najib every single day up and down the country.

Both the owners and editors of MalaysiaKini and Mahathir himself would be in jail under ISA (which Najib abolished) if Najib followed what Mahathir did when he was Prime Minister.

It is sad to see that Mahathir's personal dendam against Najib for not following his instructions has caused Mahathir to throw away any remaining honesty he had.

Neither is he even slightly afraid of the world seeing his repeated displays of hypocrisy.

It is a slap to Mahathir's face that after all these years, he is now just one side of the very same coin as Lim Guan Eng - the son of the person that Mahathir once called the biggest racist in Malaysia.

Friday, 5 May 2017

1MDB: Is RM60b enough to pay for RM41.7b?


After the majority of bank loans and short term debts have been settled by 1MDB in their past rationalization exercise, Tony Pua's statement lists out the remaining liabilities for 1MDB and details how he comes out with the RM41.7 billion figure.
Because 1MDB simply does not have any more substantial tangible assets or cash in its books, the Malaysians taxpayer will have to pay for most of 1MDB’s still-outstanding debts including:
  • RM5 billion 30-year bond guaranteed by the federal government issued in 2009;(Due only in the year 2039)
  • US$3.5 billion 10-year bonds issued in 2012, now guaranteed by MOF Inc;(due in the year 2022)
  • US$3 billion 10-year bond issued in 2013, guaranteed with a ‘Letter of Support’ issued by Finance Minister Najib Abdul Razak; (due in the year 2023)
  • US$1.23 billion borrowed from IPIC in 2015, guaranteed by MOF Inc; (it is actually an advance on the settlement - not a loan but it is due to repay by end of 2017)
  • RM800 million loan from Socso in 2010, guaranteed by the federal government; and
  • RM2.4 billion sukuk issued in 2013, which have already been assumed by MOF. (due in 2022)
The above sums up to RM8.2 billion and US$7.73 billion, (exchange rate USD1-RM4.33) or a combined total of RM41.7 billion.
*notice that other than the US$1.23 billion due within this year, the rest are all long-term debts.

Tony alleges that 1MDB has no more assets as these assets are now transferred from 1MDB to the Ministry of Finance (MOF).

Only lying politicians would say that assets are transferred but MOF do not need to take care of the liabilities.

When you transfer "businesses", you transfer BOTH the assets and the liabilities attached.

In any case, it doesn't really matter as 1MDB has always been 100% owned by tMOF. Whether the assets and liabilities are parked under 1MDB, which is parked 100% under MOF or the assets and liabilities are parked under different subsidiaries or holding companies under MOF, the end result is still the same.

The opposition will never admit that 1MDB's current situation has been mitigated and well-managed or the rationalization plan has been successful.

Pakatan has invested too much time and energy over the past 3 years to attack 1MDB and will not give up now as the general elections are near.

They will just continue attacking 1MDB using any excuse. They simply cannot stop now as their entire elections campaign strategy will fail immediately.

Anyway, to examine Tony Pua's claim, let us examine what are the assets left over from 1MDB's businesses:

1. Remaining land in TRX and share of Lend Lease's LifeStyle's quarter - RM8 billion 

After selling about 60% of the land in Tun Razak Exchange (TRX), there is still 40% of land left for sale which the govt says they would not sell in the next two to three years until the infrastructure is ready to allow it to unlock higher value and premium later.

The Govt also have ownership of 40% share in the June 2014 Joint-Venture for the 17 acres TRX LifeStyle Quarter project with Australia's Lend Lease group with a gross development value of RM8 billion.

This project comprises a retail mall (which is already 25% leased out) and due to open in the year 2020, 6 residential block and a luxury hotel. Lend Lease is among the largest international property group and is in charge of funding the development (govt contributes the land and helps with approvals) and marketing them world-wide to its international clients.

At the present moment, this 40% remaining TRX land and 40% share of the LifeStyle Quarter is worth approximately RM8 billion but is expected to increase further as the infrastructure is put in place and due to property appreciation.

2. 100% of Bandar Malaysia land - RM26 billion 

After the recent cancellation of the sale of 60% share in the Bandar Malaysia project signed in Dec 2015, the government now owns 100% of the land and project.

After value-enhancement, development plans completion, various approvals granted and increased visibility for the project, the former buyers had valued this land as high as RM26 billion today compared to RM10.35 billion valuation when the sale agreement was signed two years ago.

Bandar Malaysia land estimated to be worth RM26 billion now by the former buyer in interview dated 28 Feb 2017

Again, this RM200 billion gross development value Bandar Malaysia project is an appreciating asset that will only increase in value over time as the project develops.

3. Monetization of US$2.5 billion 1MDB's Fund Units - RM10.83 billion

As part of the recently-signed settlement between 1MDB and Abu Dhabi Govt's IPIC, these fund units which was mischievously claimed by opposition for the longest time as worthless is being monetized and the first tranches of payments have already been received by 1MDB from the foreign buyers of the funds.

On 28th April 2017, the Singapore Straits Times owned by the Singapore government reported:
"To overcome the hurdle, 1MDB agreed to waive its right to claim from Aabar the US$2.43 billion guarantee. In return, Abu Dhabi arranged for an undisclosed entity domiciled in the Seychelles to buy the units from 1MDB at the guaranteed value, to be settled by deferred payments from this month to October 2022, said a senior financial executive familiar with the matter."

4. Claim on IPIC for US$3.5 billion in payments already made by 1MDB - RM15.17 billion

Again, this is part of the 1MDB-IPIC settlement signed recently.

This was also reported by the Singapore Straits Times in that same article.
"Under the settlement, Malaysia and IPIC will enter into negotiations to resolve roughly US$3.5 billion in cash advances and payments 1MDB made to several Abu Dhabi entities. Should IPIC fail to make full settlement before the deadline of end-December 2020, the Malaysian government can pursue legal claims against IPIC."  


Among all assets, this is still the biggest question mark but is anticipated to be resolved as IPIC has little choice since all those legal documents are in 1MDB's favour as the settlement to end the arbitration was signed due to the bigger picture of diplomatic relationships and not embarrass any party.

Let's Summarize then


Remember also that the majority of the liabilities listed by Tony Pua are long-term in nature and are only due many years away while the value of the majority of assets listed above are based on current prices and will only appreciate in value in the coming years - hence the interest costs are already well covered.

Which major development projects or businesses doesn't have debts? But the government and 1MDB has done very well to monetize and develop the assets until they have become very attractive assets with great prospect which more than covers the debts and interest.

And this is not counting the vast number of jobs that the 1MDB projects have created and will create as the flagship projects continue to develop.

Also not taken into account are the big Corporate Social Responsibility projects already done, the 8 military bases that 1MDB has helped to fund and develop and the role that 1MDB has played to correct the lop-sided Independent Power plant agreements signed during Mahathir's time and will help save Malaysia and Malaysians approximately Rm200 billion in the next two decades.

So, is RM60 billion more than enough to pay the RM41.7 billion claimed by YB Tony Pua?

In fact, it is very likely that those projects under 1MDB will make huge multi-billion profits at the end of the day.

Thursday, 4 May 2017

Bandar Malaysia: Is there still a need to rush?

The news that the Malaysian Ministry of Finance has called off the sales of 60% interest in Bandar Malaysia due to non-payment came as a surprise to many.

MOF had said that the buyer, IWH CREC Sdn Bhd (ICSB), the consortium of locally-owned Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (CREC) from China (M) failed to meet the payment obligations despite being granted repeated extensions.

Seeking to pounce on anything negative about 1MDB, the likes of Wall Street Journal and the Pakatan politicians has also came out with messages that says China has refused to allow CREC to bring money out of China to invest or that the cancellation of this deal is proof that the Bandar Malaysia project is not-viable.

Some Pakatan politicians such as DAP's Tony Pua  has opportunistically slammed the cancellation saying 1MDB's rationalization plans have failed and that Arul Kanda must resign.

Strangely, these politicans were the people who had initially slammed the signing of this sale in end 2015 - claiming it is Jual Negara to China.

And now, they are slamming that the deal has been cancelled?

These politicians are strange creatures.

If the reason for non-payment is indeed due to the capital controls imposed by China to stop outflows of funds and protect their foreign reserves, then this is not the first or only case.

There have been many deals in the world that was affected by these capital controls as you can read in the South China Morning Post article here.

In fact, a month back the media had also highlighted the Forest City project in Johor was briefly affected by  the capital controls.

However, in my opinion, there are many other reasons for the cancellation of this deal but chiefly, I believe there is simply no more need to rush and 1MDB and MOF can wait to extract bigger value and a better deal for Malaysia.

These are my reasons:

1. The political pressure on 1MDB has eased tremendously since 2015.


The period when the tender for Bandar Malaysia was called in Aug 2015 was also the period where the political pressure on 1MDB, PM Najib and the Government was the highest,

Hence there was a need to prove that 1MDB can monetize its assets and pay-off its big debts by itself without any assistance or bail-out for the government.

Due to the huge world-wide negative publicity on 1MDB then, it is likely that the Bandar Malaysia sale may not have gotten its best value.

On top of that, there was also uncertainty about Malaysia's economy in 2015 which came true when our economy slowed in 2016 - which would mean the Bandar Malaysia asset was not as attractive then.

Now that the political pressure and negative publicity of 1MDB has eased and our economy has started to recover strongly, it is likely that new bidders and more bidders may give a higher valuation for the strategic Bandar Malaysia land.

2, 1MDB cash-flow now is no longer squeezed compared to that period in 2015.



Recall that the sale of Edra  for a combined equity and debt of about RM17 billion in 2015 has allowed 1MDB to clear off all short-term loans and bank debts - except for the 3 bonds due in the years 2038, 2022 and 2023 - and has left 1MDB with RM2 billion cash to pay off bond interests and working capital requirements.

1MDB had also successfully sold plots of the Tun Razak Exchange (TRX) land to various local and international buyers which also has helped with 1MDB's cashflow.

It is also important to note that last week's settlement between Abu Dhabi and 1MDB has allowed 1MDB to monetize US$2.43 billion worth of fund units.

On 28th April 2017, the Singapore Straits Times owned by the Singapore government reported:
"To overcome the hurdle, 1MDB agreed to waive its right to claim from Aabar the US$2.43 billion guarantee. In return, Abu Dhabi arranged for an undisclosed entity domiciled in the Seychelles to buy the units from 1MDB at the guaranteed value, to be settled by deferred payments from this month to October 2022, said a senior financial executive familiar with the matter.

Out of this US$2.43 billion, US$1.2 billion have to be paid to IPIC by the end of this year while the remaining US$1.23 billion (RM 5.32 billion) will be used to pay off half-yearly interests right up to the year 2022 for the US$3.5 billion bonds.

On top of this, 1MDB had also cleared the way to pay off its biggest single debt - which is this US$3.5 billion bonds where the Singapore Straits Times also said:

"Under the settlement, Malaysia and IPIC will enter into negotiations to resolve roughly US$3.5 billion in cash advances and payments 1MDB made to several Abu Dhabi entities. Should IPIC fail to make full settlement before the deadline of end-December 2020, the Malaysian government can pursue legal claims against IPIC."  

Certainly there is new found cash-flow flexibility for 1MDB here.

The single biggest concern about the termination of the sale of Bandar Malaysia is really the RM2.4 billion Bandar Malaysia sukuk which is only due in various phases between the year 2021 to 2024 - but you can weigh that against the additional RM5.32 billion in cash-flow flexibility arising from the monetization of the fund units.

Therefore, there is certainly breathing space and cash-flow flexibility for MOF and 1MDB to extract the best value for Bandar Malaysia now which did not exist in the year 2015.

This is further evidenced by TRX's bold declaration early last month that there will be no more land sales in TRX for the next two to three years in order to unlock a higher land premium later,

3. The value and prospects for Bandar Malaysia have greatly increased since.


Remember that the tender for Bandar Malaysia was called in August 2015 and the signing of the sale was in December 2015 amidst great negative publicity and a slow-down in the economy then which has now improved on both counts.

Since then, land values in the Klang Valley has increased and much have been done to increase the prospect or remove the uncertainties for Bandar Malaysia.

For one, the MRT2 Sungai Buloh–Serdang–Putrajaya line has started construction and will have two stations in Bandar Malaysia - SSP21 and SSP22.

Additionally, the Singapore-Kuala Lumpur High Speed Rail-line agreement was finally signed on Dec 14, 2016 between the governments of Singapore and Malaysia which also confirms Bandar Malaysia to be the terminus station.

This signing moves it from being a planned HSR project to a confirmed HSR project in progress.

High-Speed Rail official signing in December 2016

The realignment of the Duta-Ulu Kelang Expressway Phase 3 (DUKE 3) expected to run along the border Bandar Malaysia has also been signed by the government in January 2016.

Certainly the confirmed and increased connectivity has further increased the value of Bandar Malaysia since the tender and signing of sale in 2015.

At the time, the total value of Bandar Malaysia based on the 60% sale price of RM7.41 billion was RM12.35 billion for the 486 acres land or 21.17 million square feet.

That works out to just RM583 per square feet.

Compare this to the plots of land sold in nearby TRX including Tabung Haji's acquisition of land in TRX for RM2,780 psf and Mulia Group's acquisition of land in TRX for RM4,490 psf -  in line with other commercial land deals in the Jalan Ampang and KLCC areas that were transacted around the RM3,000 to RM3,500 psf range.

And you must remember also that once the HSR is completed, Bandar Malaysia is just 90 minutes away from Singapore by rail.

Singapore commercial land prices are very high. In Oct 2016, a 1.1 Hectare plot of land was sold for SGD2.57 billion (RM7.96 billion). This works out to a staggering RM67,228 psf.

Even if Bandar Malaysia land is worth only 5% of Singapore land, it is already RM3,361 psf - much higher than the RM583psf in the now aborted sale.

In fact, one of the buyers IWH had publicly estimated the value of the Bandar Malaysia land at RM26 billion less than 3 months ago in an interview in February 2017 more than double the RM12.35 billion valuation during the sales signing in December 2015.

Tan Sri Lim Kang Hoo of IWH valuing the Bandar Malaysia land at RM26 billion now

Additionally, 1MDB and MOF, as the single largest shareholder in Bandar Malaysia also benefits from the 16 months planning and publicity put into developing Bandar Malaysia.

Aborting the sale does not mean that the High Speed Rail project or Bandar Malaysia project has been cancelled. It just mean that there are possible new JV partners coming in. MOF continues to plan and develop the site while waiting for new partners.

As one of my friends put it:
This is business matter and not politics as bring played by PH. If the government had played politics, then they would have further extend the agreement and terminate it after the election.

Conclusion

The financial markets have decided that the initial buyers are the losers in this cancellation. Share prices of locally listed IWH and its sister company Ekovest was punished by the markets - with Ekovest dropping as much as 30% within a single day after the cancellation of the sale was announced.

The cancellation of the sale certainly benefits the Malaysian Govt more than the private companies which got punished badly.

With the reasons given above, MOF's bold decision to cancel the sale agreement due to delayed payments is a positive step to ensure Malaysia and the Rakyat gets a better deal as it puts 1MDB and MOF in a much stronger and un-pressured position to extract higher values.

However, all is not cast in stone yet as IWH and China Rail has strongly protested the cancellation while PM Najib is scheduled to attend a Belt and Road forum in China next week where Malaysia is expected to sign a Memorandum of Understanding on basic infrastructure development with China.

I would not be surprised if Malaysia and the buyers revive the sale -perhaps with penalties for late payment or even revised terms and valuation more favourable to Malaysia. After all, the JV for Bandar Malaysia was one of those deals signed in PM Najib's historic visit to China in November 2016 where President Xi Jinping was a witness.

Regardless of the outcome, the evidence shows that the move by MOF to cancel the sale of Bandar Malaysia yesterday was the right move to extract better value for Malaysia.

Tuesday, 2 May 2017

Malaysia's battle against Illicit Outflow of Funds and those who want to stop us

Today, local portals are highlighting the latest "Illicit Outflows of funds" report by Global Financial Integrity (GFI) which states that in 2014, Malaysia lost between US$26.6 billion and US44.3 billion in illicit outflows for that year.

This is between 7.87% to 13.1% of our 2014 GDP of US$338.1 billion. Taking the midpoint of 10.49% would mean Malaysia losing US$35.45 billion in 2014.

The previous report had said that Malaysia had lost US$48,251 billion in 2013 - or about 14.97% of our 2013 GDP of US$322.34 billion.

Illicit capital outflow does not mean all is corruption or "stolen money".

As GFI had clearly said, the vast majority of illicit outflows is due due to the current rampant practice of trade mis-invoicing or trade mispricing.
The fraudulent misinvoicing of trade transactions was revealed to be the largest component of illicit financial flows accounting for 83.4% of all illicit flows—highlighting that any effort to significantly curtail illicit financial flows must address trade misinvoicing." said GFI in their report
Transfer mispricing is a scam used by MNC to avoid paying high taxes. For example, goods produced by them in Malaysia are 'sold' or UNDER-invoiced to their subsidiaries, conveniently located in a tax haven, at an artificially low price. Or foreign companies OVER-invoicing Malaysian companies on our imports  - also to avoid paying high Malaysian corporate taxes.

At 13.5% of all trade, Singapore, as a re-export hub, is Malaysia's number one trading partner and trade between us is about RM200 billlion - and this, coupled with Singapore bank's strong privacy rules - leaves a lot of scope for trade mispricing and hence "illicit capital outflow"

The main problem is the big corporate tax difference between Singapore (17%) and Malaysia (26%).

Would a company rather pay 17% tax instead of 26% tax? A no-brainer.

Before Singapore introduced their GST, their corporate tax was even higher than Malaysia at 33% but managed to reduce it gradually over the years to 17%. Even Thailand was at 30% corporate tax just few years ago managed to reduce it to 20% (lower than Malaysia) when they implemented their GST.

These figures are HUGE.

Based on GFI's historical data, during the 2004-2007 period, almost one quarter of Malaysia's entire GDP was illegally diverted overseas with no tax paid and also not re-invested in Malaysia.

How is it possible that any one country can tolerate as much as 25% of our country's income per year being siphoned out to a neighbouring country and benefiting them?

Why should Malaysia allow hundreds of billions of our money flow out of our country illegally without paying Malaysian taxes?

Somewhere in the period 2010 to 2011, the Najib Govt started taking things seriously and started implementing measures to reduce this daylight robbery.

In past few years, BNM has reported on these measures which includes:
- More stringent monitoring and cooperation with neighbouring countries.;
- Enacting a new Money Services Business Act 2011, and relicensing of all money services businesses.
- gradual reduction in corporate tax to reduce the difference between the neighbouring country to discourage tax evasion.

Already, as you can see from the table, the measures are already working and illicit outflows has gradually dropped to 14.9% in 2013 as compared to 25% in 2005.

With the latest release of GFI numbers for 2014, this figure has dropped further to between 7.87% to 13.1% of 2014 GDP - or 10.49% if you take the midpoint.

Despite the staggering amount involved, it does suggest that govt efforts to reduce the illicit outflows have started to work.

While figures for 2015 are not yet available but moving forward, the trade mispricing issue will also be mitigated with that year's introduction of GST which requires reporting of value-added at various stages of production - making it tougher to under-declare exports or over-declare imports.

In preparing for GST, govt has already committed and announced reductions to our income tax and corporate taxes and will continue to gradually reduce these taxes in coming years.

Further reductions in corporate tax as commodity prices recover or as our GST system becomes more efficient will further reduce these outflows.

Those who want to stop us


Which is why I frequently say that those who protest against GST are traitors to Malaysia who seem to want to benefit a neighbourng country and encourage tax evasion and illicit outflows.
What do Malaysia and these anti-GST people gain by having our neighbor countries make TENS, if not HUNDREDS of BILLIONs of ringgit EVERY YEAR at Malaysia's expense?

Even more ridiculous, At a recent dialogue session in Shah Alam earlier in April 2017, Tun Dr Mahathir Mohamad had suggested that the government should look at increasing corporate tax to generate revenue instead of taxing the general public through GST.

While the whole world wants to be competitive and cut corporate tax, Mahathir wants to increase the corporate tax.

  • The USA wants to cut corporate tax:
Impact of Trump corporate tax cut could be gigantic 
  • Indonesia wants to cut: 
Indonesia president considers cutting corporate tax rate to 17 percent: govt website 
  • Australia also wants to cut:
Australia cannot afford not to cut company tax rates for big companies:


It is certainly strange that our former Prime Minister wants to abolish GST and increase our Corporate tax to move our country backward, become less competitive and encourage even greater illicit capital outflow by increasing the corporate tax difference between us and others.

Why are we allowing our neighbour country to collect tens of billions of taxes every year that should rightly belong to Malaysia? Govt already said many times that GST will help reduce illicit outflow

These people are considered traitors to Malaysia.

Those who are against GST and not allowing Malaysia to reduce our taxes and help reduce these mispricing and illicit outflows are actually trying to deprive Malaysia tens or hundreds of billions of our own money.

Wednesday, 26 April 2017

1MDB-IPIC: Bombshell letter from the British Virgin Islands Govt

Further to my blog post two days ago on the USD6 billion settlement between IPIC and 1MDB, there has been a new development.

In IPIC's announcement to the London Stock Exchange on the settlement with 1MDB dated 24th April 2017, the last paragraph states this:

"The parties have also agreed to enter into good faith discussions in relation to payments made by 1MDB Group to certain entities."

By any account, this is an unusual statement to make as it hints that 1MDB may have paid IPIC or Aabar the disputed amounts but not directly saying it.

The reason is simple.

IPIC cannot say it as they had previously announced to the stock exchange and to the world that they had never guaranteed the fund units and that Aabar BVI does not belong to them.

In fact, they had issued a press statement back in April 2016 that effectively says it didn't receive billions in payments sent by Malaysia fund 1MDB.

IPIC cannot now say "oops, we made a mistake" as it would be a big loss of face and unimaginable damage to their reputation.

It is as good as saying that their two top officials at IPIC and Aabar had cheated another country and pocketed billions.

In fact, it is also very hard for IPIC to answer why a Abu Dhabi Govt owned sovereign fund would want to guarantee a whopping US$3.5 billion worth of bonds issued by another country;;s company in 2012. This guarantee was never disputed by Abu Dhabi.

Imagine if Malaysia Govt had to announce that their top officials of Khazanah and PNB had cheated billions from another country and pocketed billions in their accounts?

This is also the reason why the former IPIC Managing Director and Chairman of Aabar, Qubasi as well as the Managing Director of Aabar Badawy has never been charged for any crime in this whole affair despite all the evidence pointing to them in the signed agreements and payments.

Today, Finance Minister II Johari said again that based on the documents he has seen, he is very confident that 1MDB will win the arbitration.

Of even greater consequence, MalaysiaKini reported today that Johari has revealed that there is an official letter from the Registrar of Corporate Affairs of the British Virgin Islands Government dated Aug 11, 2016 that confirms that the disputed Aabar BVI is officially owned by IPIC.

The existence of this official letter would be a bombshell to IPIC and its arbitration efforts.

On top of that, 1MDB also has in its possession, verified officially signed letters of guarantees by Aabar's top bosses then that they guarantee the fund units totaling USD2.5b, which 1MDB is monetizing now - probably with IPIC's help to honour the guarantees.

On 28th April 2017, the Singapore Straits Times owned by the Singapore government reported:
"To overcome the hurdle, 1MDB agreed to waive its right to claim from Aabar the US$2.43 billion guarantee. In return, Abu Dhabi arranged for an undisclosed entity domiciled in the Seychelles to buy the units from 1MDB at the guaranteed value, to be settled by deferred payments from this month to October 2022, said a senior financial executive familiar with the matter.


This would also mean that it is very likely that IPIC has agreed that by the year 2020, 1MDB can claim back the USD3.5b from them which 1MDB will then use to pay the USD3.5b bonds due in the year 2022.

This was also reported by the Singapore Straits Times in that same article.
"Under the settlement, Malaysia and IPIC will enter into negotiations to resolve roughly US$3.5 billion in cash advances and payments 1MDB made to several Abu Dhabi entities. Should IPIC fail to make full settlement before the deadline of end-December 2020, the Malaysian government can pursue legal claims against IPIC."  


So, the USD2.5b + USD3.5b of 1MDB that was previously in default has been resolved.

This completes the last step of the rationalization plan and prove that not a single ringgit of 1MDB's money is missing.

No RM2.6 billion issue and no Goodstar money being diverted anymore.

Therefore, not a single Ringgit of Government money or tax-payers money has been used to "bail-out" 1MDB.

Yes, the opposition will be very angry at this development as they have attacked 1MDB for more than two years now and it was their main attack weapon against the Government - thus there will be disbelieve and heck of a lot of anger.

But the reality is that the last plank of the rationalization exercise is well in progress.

Despite various Pakatan people lying that Malaysia now have to pay double to IPIC or that taxpayers now have to foot the bill, the foreign investors and the financial markets don't believe them.

If foreign investors believed that Malaysia govt now have to pay USD6b extra to IPIC or have to use tax-payers money to bail-out 1MDB, they would have punished Malaysia and sold down our shares or taken money out. Not put money in.

Over the last two days since the settlement announcement, our Ringgit and our stock-market has gone on quite a rally today and yesterday, which signifies strong investor confidence.

Ringgit Rallies two days ago from RM4.40 to RM4.35 vs the USD
The Sun daily also reports that analysts have said "the arbitration settlement agreement between 1MDB and Abu Dhabi’s IPIC is also seen as a boost for the local market."

Bursa Malaysia also benefits as the stock market continue its rally
UPDATE: As at end of 2nd May 2017, the Ringgit and Stock Market has now entered a FIFTH day straight of strong gains.


1MDB did a lot of good too!

Some may argue that things may have gone wrong with the initial transactions but then hindsight is 20/20. Most importantly is that 1MDB and the govt has delivered in recovering all the money and ensuring all 1MDB's debt has been settled.

On top of all those Corporate Social Responsibility (CSR) exercises such as rural electrification, mini water projects, mobile clinics, scholarship for students and the tens of thousands of people sent for their Haj, 1MDB also have done good stuff including helping Malaysia finally solve the lop-sided Power Plant agreements of Mahathir's that has cost the Rakyat RM200 billion over the past 20 years.

1MDB also paid for to build and upgrade 8 military bases costing billions throughout Malaysia. Watch the video:



And then there is the Tun Razak Exchange, which is progressing fast and includes Malaysia's tallest building (taller than KLCC) to be completed in 2018 and is already half-way completed.

Here is a video of it's progress as at end December 2016.


This is the progress of the KLCC-beating TRX Signature tower earlier this month:


And of course, Bandar Malaysia is also coming up which is deemed as the ASEAN hub of the One Belt One Road initiative that connects Malaysia to the world by rail.


For all of Pakatan's attacks on 1MDB weaknesses, you will seldom see them highlighting the positive side of 1MDB which you can see is very substantial too and crucial to the growth of Malaysia in the coming decades that will generate hundreds of billions in growth and hundreds of thousands of jobs.

The DOJ and Switzerland invetigations

A basic foundation of the July 2016 US DOJ civil suit and the Switzerland investigation was due to the fact that 1MDB said it had paid money ti IPIC but IPIC had then said earlier in 2016 they did not receive such money - thus there is missing money and hence money laundering.

Now that IPIC has admitted that there was such payments then there is no "missing money" and hence no money laundering.

For a more detailed recap on why all those allegedly "missing money" was never legally owned by 1MDB and why I think the USA DOJ civil case and Swiss investigations will now fail  , read my July 2016 post.

Sunday, 23 April 2017

The April 2017 IPIC-1MDB settlement: What you need to know.

The news that 1MDB and Abu Dhabi's IPIC has come to a USD6 billion settlement instead of continuing with their international arbitration has come to a shock to many but not to me.

I had always believed that IPIC had the most to lose should the arbitration continue.

Once clue given by the Singapore Straits Times is this:
"Messy and protracted arbitration over the dispute would have brought into the open serious failings in the management of state-owned entities such as 1MDB, Abu Dhabi's International Petroleum Investment Company (IPIC) and its associate concern Aabar Investments, they said."
But a bigger clue is this:
"Mr Qubaishi, who served as IPIC's managing director, was arrested in the Gulf emirate. He has yet to be charged with a crime."

Mr Khadem Al Qubaishi was IPIC's managing director of IPIC and also the Chairman of Aabar Investments. As late as the year 2015, he was listed as the Arab world's 14th most powerful person.

Qubaishi and the Aabar CEO Mohamed Badawy Al Husseiny, who are also  the targets of the US Department of Justice civil case for money laundering, are he ones most complicit in the 1MDB-IPIC dispute.

Money from 1MDB had entered into their own accounts, their signatures are everywhere in all the agreements between 1MDB and Aabar and they are also the owners and directors of that so-called "Fake Aabar" in the British Virgin Islands.

The evidence on them is overwhelming.

By right, they would be the first ones charged for fraud, corruption and abuse of power and yet both have never been charged.

The reason is simple. If they are charged for those crimes, it is an admission that Abu Dhabi's top officials had defrauded 1MDB with fake companies and unauthorized fund receipts. This would mean that 1MDB would immediately win the arbitration over IPIC.

Qubashi and Badawy being found to be guilty would also be very embarrassing for the Abu Dhabi government.as it would be like our Chairman and CEO of Khazanah or PNB being found guilty of falsifying documents and companies to cheat billions from other countries.

Therefore, it is no surprise that IPIC had agreed to abandon the arbitration and reach a settlement with 1MDB.

For the longest time, IPIC had never recognized that 1MDB had paid them USD3.5 billion and that Aabar had guaranteed 1MDB's two fund units - the so-called Brazen Sky Cayman fund units and the GIL funds.

Now, IPIC has admitted to these payments and said they will work with 1MDB to resolve this as Bloomberg had reported and IPIC had announced:
"The two countries also agreed not to pursue legal action before December 2020 as they negotiate the dispute over $3.5 billion linked to the two bonds, the person said."
As part of this settlement, 1MDB will pay U$2.5 billion through proceeds raised from the sale of units Brazen Sky Ltd. and 1MDB Global Investment Ltd., 

The USD2.5 billion fund units owned by 1MDB

To recap, 1MDB still had two financial assets in the form of units.

1) The Brazen Sky units of US$940m.

This is balance of the US$2.38b profits and capital of the US$1.8b investment in PetroSaudi. where US$1.44 b had already been redeemed and used.

This fund is guaranteed by the real Aabar PJS (although IPIC had initially disputed this).

The initial transfer from 1MDB to PetroSaudi was the source of all those allegations that Riza Aziz and Jho Low had received all those money. Now since 1MDB not only got back all the money but even made a decent profit of USD500 million on the investment in PetroSaudi, it means that no funds were stolen here and all investments made by PetroSaudi was legitimate - hence no crime committed.

2) US$1.5b GIL funds, also guaranteed by Aabar PJS.

This is balance of the US$3b GIL 2013 bonds. where US$1.5b was retained for 1MDB's own use.

It is this US$1.5b GIL fund which people allege the RM2.6b in Najib accounts came from.

If this fund is now redeemed, it means that the RM2.6b cannot possibly be stolen money since no money has been stolen.

It looks like the recent recovery of oil and commodity prices have allowed for the assets under these two funds to recover and to be realized by the fund managers.

It is not clear if IPIC/Aabar had also honoured its guarantee and assisted in redeeming these units but it's highly possible given that IPIC does not want to risk anymore embarrassment. 

1MDB had always had the Deed of Guarantee from Aabar on both these units duly signed by the then Chairman and CEO of Aabar 



Using the USD2.5 billion proceeds 1MDB can now repay the US$1b paid by IPIC in June 2015 plus all remaining interest for the US$3.5b bonds guaranteed by IPIC.

A continuation of the June 2015 USD6 billion Asset-swap arrangement

The entire USD6 billion of payments and guarantees was identified as assets for the June 2015 1MDB-IPIC asset swap agreement in exchange with IPIC was based on the following:

Let's list the individual components as a,b,c,d,e and f.

Assets from 1MDB:
a) USD 3.5 billion cash deposits paid to Aabar BVI.
b) USD 1.5 billion GIL funds (Fund Manager introduced by BSI and guaranteed by Aabar BVI)
c) USD 940 million Brazen Sky fund units (Guaranteed by Aabar Investments ABU DHABI - not the disputed Aabar BVI - this is in the AG report and the PAC report)
Assets from IPIC:
d) 1MDB's USD 3.5 billion bond principal
e) 1MDB's USD 1.5 billion future bond interests until bond maturity in 2022 for the USD3.5 billion bond
f) USD 1 billion in cash advance (paid to 1MDB in June 2015)
Under the latest settlement agreement,1MDB will redeem, probably with IPIC's help due to the guarantee, the  "b) USD 1.5 billion GIL funds". and the "c) USD 940 million Brazen Sky fund units " 

This approximately USD2.5 billion will then be used by 1MDB to settle the "e) 1MDB's USD 1.5 billion future bond interests" and pay IPIC back the "f) USD 1 billion in cash advance"

As you can see, b, c, e and f has been settled.

This leaves a) and d) to be settled.

With that, the dispute with IPIC is now limited to the "a) US$3.5b assets that 1MDB insist it had paid to IPIC, which IPIC denied receiving and was the key issue in their arbitration.

But now IPIC has finally admitted that there was such payments and said that they will work with 1MDB to resolve these payments which would then be used by 1MDB to pay for the dUSD3.5 billion bonds when it eventually comes due in five years time in the year 2022.

That is why IPIC and 1MDB are giving themselves up to the year 2020 to settle this and would not resort to any lawsuits between each other during this period.

The arrangement also means that 1MDB does not give up its right to legally sue IPIC for these USD3.5 billion but can only do so after the year 2020.

This settlement is clearly still within the spirit of the original June 2015 Asset-swap arrangement and is in fact, clearly a progression of that deal.

1MDB has clearly made good progress to recover their money and pay off debts and I can see redemption or sale of the fund units as the second last step. It is hoped that 1MDB and IPIC can take that final step to resolve the final USD3.5 billion.

The fact that IPIC has now finally acknowledged there was USD3.5 billion of such payments from 1MDB to "certain parties" means yet another critical step for 1MDB to finally clear all its controversies and "missing money" allegations.

A basic foundation of the July 2016 US DOJ civil suit was due to the fact that 1MDB said it had paid money ti IPIC but IPIC had then said earlier in 2016 they did not receive such money - thus there is missing money and hence money laundering.

Now that IPIC has admitted that there was such payments then there is no "missing money" and hence no money laundering.

For a more detailed recap on why all those allegedly "missing money" was never legally owned by 1MDB and why I think the USA DOJ civil case and Swiss investigations will now fail  , read my July 2016 post.

Thursday, 20 April 2017

The BIG LIES: Tabung Haji, SRC, Putrajaya Perdana, Rafizi Ramli and Najib

This is not the first time Rafizi has tried to maliciously link Prime Minister Najib, Tabung Haji and SRC.

His previous attack had caused some 3,600 depositors to withdraw RM500 million from Tabung Haji and lose their place in the waiting list to perform their haj. This eventually caused a big backlash against Rafizi - losing him a lot of trust and support as people's lives were affected negatively. But this will not stop him from trying again.

But first, let's look at the latest allegations Rafizi made in his latest two blog entries here and today:

  1. WANG PENCEN DARI SRC INTERNATIONAL DAN WANG TABUNG HAJI DIGUNAKAN UNTUK MEMBAYAR JHO LOW
  2. TABUNG HAJI PERLU JELASKAN KENAPA SYARIKAT BERSEKUTUNYA TERIMA RM140 JUTA DANA SRC INTERNATIONAL SDN BHD
  3.  Sebanyak RM170 juta disalurkan terus dari SRC International Sdn Bhd ke Putra Perdana Construction Sdn Bhd, iaitu RM35 juta pada 8 Julai 2014, RM105 juta pada 14 Julai 2014 dan RM30 juta pada 8 Ogos 2014.
  4. Pada hari yang sama iaitu 8 Julai 2014, sebanyak RM34.99 juta dipindahkan dari Putra Perdana Construction Sdn Bhd kepada Dato’ Seri Najib Tun Razak (sebanyak RM27 juta) melalui sebuah lagi syarikat bernama Permai Binaraya Sdn Bhd.
  5. Jumlah RM140 juta yang diterima oleh Putra Perdana Development Sdn Bhd dalam bulan Julai dan Ogos 2014 kemudian dibayar kembali oleh Putra Development Sdn Bhd pada 12 Disember 2014 kepada SRC International Sdn Bhd melalui Putra Perdana Construction Sdn Bhd.
Assuming (and this is a big assume) all of Rafizi's data and allegation is correct, then the first thing you need to know is this:

FACT 1. Najib is not a board of directors nor in the management of either Tabung Haji, SRC international nor Putrajaya Perdana Bhd or any of their subsidiaries.

This means that under the law, he is not responsible or even aware about the day-to-day transactions and business dealings between the companies,

Also, the second point you must know is this:

FACT 2. SRC International core business IS to invest in companies or projects and make a return.

Knowing this, there is no reason and nothing illegal in what SRC International is doing in having business dealings with Putrajaya Perdana Bhd 

FACT 3. SRC International and other companies in Malaysia DO engage in CSR activities.

Petronas does this, Khazanah does this too. And so do public listed companies such as Genting Bhd, which earlier courted controversy for spending RM190 million in CSR on some foundations in 2013.

Which leads us to this 

FACT 4. That "Najib personal account" is not a day to day personal account. In fact, he does not even manage these accounts himself.

Watch this video where after he was sacked as Deputy Prime Minister, Muhyiddin had admitted himself that there had always been a secret UMNO president account even from way back then which is used for party purposes.


This practise is allowed for under UMNO's constitution as the UMNO president holds a lot of discretionary power due to secrecy and political reasons.

And this is why we come to:

FACT 5. Najib had received at least USD200 million (RM880 million) from Saudi Arabia directly into his account of which at least USD80 million (RM352 million) directly from the Ministry of Finance, Saudi Arabia



The Pakatan people will never highlight this and you are probably not aware of this.

That there were transfer of funds, was also confirmed by the Saudi Arabia Foreign Minister.


Why did the Saudi's give Najib money? Well it was because of Anwar Ibrahim and his past links to terrorists and also due to Saudi's own interest to stop the Arab Spring in their own backyard which took place from 2009 to 2014.

Do you really think that if Najib had lied about the Saudis that their King Salman will still come here to Malaysia, be so buddy-buddy with Najib and invest RM31 billion in Malaysia in Feb 2017?

FACT 6: Rafizi did not dare accuse that Najib had spent any of the alleged RM27 million on Najib himself but paid to 17 parties including allegedly to former PAS Deputy President Nasharuddin Mat Isa

Now, we know Nasharuddin was no longer Deputy President of PAS as of  the year 2011 and in fact, he was no longer anywhere in PAS leadership before GE13 as he was was expelled from PAS's governing council. He did not even recontest his parliamentary seat at the 2013 election.

In fact, Nasharuddin went on to found a NGO foundation called Yayasan Nassar,  which gave its purpose as:
"Yayasan Nassar ("YN") ditubuhkan untuk tujuan mengurus, mentadbir perkara-perkara yang berkaitan dengan pendidikan bantuan kerajaan bagi sekolah harian ataupun agama, kebudayaan, kebajikan dan sosial. Ini adalah untuk menjaga keharmonian agama, kebajikan serta sains social masyarakat setempat mahupun sejagat."
Yup! For education, charity and religious harmony purposes.

This could explain where accusations from Rafizi that Nasharuddin received money from Najib in 2014 is wrong. It probably went to his foundation and not to Nasharuddin personally.

Also, since Nasharuddin had already been kicked off from PAS leadership in 2013. Rafizi's allegations that Najib's money to Nasharuddin had been used to "buy" PAS in order to "cover-up" 1MDB (which only became an issue in 2015) and be friendly to Najib is so slanderous.

This is why PAS President Hadi Awang says Rafizi is a 300% liar and asked him to repent.

Now, back to Tabung Haji and Putrajaya Perdana and so-called "wang pencen":

FACT 7. No WANG PENCEN or wang Tabung Haji was used to pay SRC International.

This fact is actually contained within Rafizi's own postings where he wrote:
"Dalam bulan Mac 2014, Putra Perdana Development Sdn Bhd telah membeli 37.5% pegangan di dalam Iskandar (Holdings) Company Limited dari Unity Capital Partners (Cayman) Limited. Kedua-dua syarikat tersebut iaitu Iskandar (Holdings) dan Unity Capital Partners. "
"Dalam bulan Disember 2014, seperti yang dilaporkan sendiri di laman web Putrajaya Perdana Berhad yang saya tunjukkan di atas, Tabung Haji membeli 30% pegangan di dalam Putrajaya Perdana Berhad dari Cendana Destini Sdn Bhd"
Rafizi even posted the graphic of these milestones.


Right, March 2014 and Dec 2014.

But then Rafizi himself had stated that the first ever dealings between Putrajaya Perdana and SRC international only started in July 2014.

And also, Rafizi himself said that Tabung Haji only invested to buy 30% of Putrajaya Perdana Bhd in December 2014.

Do you see how sotong this is? Back to the future?

Putrajaya Perdana bought those allegedly "Jho Low"-linked companies in March and the first ever dealing with SRC was in July while Tabung Haji came in only in Dec 2014. So, how can it be that any SRC money or wang pencen or Tabung Haji? Back to the future?

In fact, those Jho Low linked companies are holding companies that has 133 million sq ft of gross floor area to be developed in the Medini hub of Iskandar Malaysia, which is worth quite a bit now.

Not to mention that it was Rafizi himself that revealed that Putrajaya Perdana was already a profitable company even in 2013, the year before all those dealings that Rafizi alleges with revenues of RM705 million, current assets of RM445 million and pre-tax profits of RM62 million.

Putrajaya Perdana Bhd FY2013 financial summary taken from Rafizi's blog

And plus, Tabung Haji bought EXISTING shares from the previous owners. Tabung Haji did not invest any money in Putrajaya Perdana, which would mean the money paid by Tabung Haji would got to the existing owners who sold the shares - NOT into Putrajaya Perdana's bank accounts.

Hence, it is impossible for Tabung Haji money to be paid to SRC.

 

As you can see from the shareholders information above. There was no increase in number of shares after Tabung Haji took a 30% stake in the company - hence it cannot be new shares issued or "injection" (as Rafizi calls it).

In fact, after Tabung Haji bought their stake, the financial performance and profits of Putrajaya  Perdana increased too.


FACT 7. SRC money is not WANG PENCEN 

Not anymore. SRC International may have loaned money from KWAP but this money is guaranteed and the entire loan is being serviced properly and not in default.

So, legally it is not wang pencen at all. What SRC international does with their money and their profits is up to SRC and nothing to do with KWAP.

And plus, as Rafizi pointed out, Putrajaya Perdana paid back RM140 million, the bulk of the proceeds, to SRC International within the same year leaving a balance, which were either paid back later or for work done or for the above-mentioned CSR, which SRC is entitled to do.

FACT 8. Putrajaya Perdana Bhd was a listed company. Tabung Haji did not overpay to buy a 30% stake.

On Jan 31 2008 the then listed UBG bought 49% in Putrajaya Perdana Bhd for RM332 million cash or 16.6 times Price-to-Earnings ratio (PE Ratio). This values 100% of Putraja Perdana Bhd then at RM678 million.

In turn, when Tabung Haji bought 30% of Putrajaya Perdana for what Rafizi says is RM193 .5 million, it would mean valuing 100% of Putraja Perdana Bhd then at RM645 million - lower than in 2008.

And as Rafizi previously showed proof, even in 2013 Putrajaya Perdana already had revenues of RM705 million, current assets of RM445 million, pre-tax profits of RM62 million and after tax profit of RM45 million.

But after Tabung Haji bought the stake, in 2015 Putrajaya Perdana did even better.

Putrajaya Perdana Bhd FY2015 financial summary
In FY2015, Putrajaya Perdana's revenues almost doubled to RM1.2 billion, total assets has almost doubled to RM709 million, pre-tax profits is now RM80 million and after tax profit has grown to RM57 million.

This means Tabung Haji had paid a historical PE of 14.3 or a future PE of just 11.3 times - as compared to the 16.6 times that UBG paid in the year 208.

This is not considered over-valued if you compare to the currently listed construction company on Bursa where the PE ratio of IJM Bhd is 27.28 times or Gamuda (20.14 times) or Binapuri Bhd (100.23 times).

In fact, As of October 31, 2016, Putrajaya Perdana's outstanding order book and tender book stood at approximately RM1.25 billion and RM1.93 billion, respectively.
This suggest that when Putrajaya Perdana Bhd is eventually re-listed as per their plans, Tabung Haji would make quite a good profit and in no way had lost money to Jho Low, Rafizi or anyone.

As you can see from the above, so many of Rafizi's malicious allegations on SRC and Tabung Haji and Wang Pencen have been debunked as mere lies,

Why would you want to trust someone that even a religious leader like Hadi Awang calls a 300% liar?

Which leads us to our final fact for the day:

FACT 9. Rafizi is a court confirmed serial liar and his self-admitted job is "to hasut the rakyat tiap-tiap hari". So there is very little reason to trust him.

5 court cases confirmed lost by Rafizi just within the past year. More on the way...
or you can watch him admit it himself here: