The 1MDB Chief was spinning out of control.
PRESS STATEMENT I almost feel really bad heaping so much embarrassment upon the besieged 1MDB President who is spinning out of control.
Let me repeat myself, I am truly flabbergasted by Arul Kanda’s definition of “success, against all odds”.
Any businessman or accountant, upon hearing the above argument from Arul Kanda will be laughing their pants off. He conceded that I was correct in my “proper accounting” calculations because interest costs amounting to a whopping RM3.5 billion or more must be taken into account if 1MDB were to take into account dividends.
However, no one would understand what the heck was Arul Kanda’s “cash on cash breakeven” argument. Does he mean that cash used to service interest cost isn’t “cash”?
It was even worse when I decided to re-check the audited accounts of 1MDB and its Edra subsidiaries for 2013 and 2014. The Edra power plants never paid a single sen of dividend to 1MDB, the parent holding company.
Let the parliamentary Public Accounts Committee’s (PAC) Hansard be the judge of whether 1MDB broke even according to Arul Kanda, or suffered a massive loss as a result of the sale of Edra Global at USD9.83 billion.
Arul Kanda was upset at being told the truth.
He now says I have “conveniently forgotten to mention that whilst 1MDB purchased the power assets at approximately RM12 billion and sold it at RM9.83 billion, the company also received approximately RM2 billion in cash dividends during the period of ownership, which totals RM11.83 billion i.e. a cash-on-cash, near ‘break-even’ position. ‘YB Tony knew this fact, as recorded in the Hansard of my explanation during the PAC proceedings, yet he chose to hide it and mislead the Malaysian public’.”
Two pages of the relevant proceedings from the Hansard with regards to the above tell the story.
As can be read, I had reminded Arul Kanda, and the Barisan Nasional (BN) MPs present, that “if you chose to take into consideration the purported RM2 billion dividends, then you must similarly take into consideration the cost of the loans taken to acquire these power plants”.
Two days ago, 1MDB said its President, “Mr Arul Kanda has delivered major asset sales and repaid all short term debt/bank debt, with 1MDB now having RM2.3 billion cash in the bank. The company has also recently repaid the RM950 million standby credit facility from the Government of Malaysia. Even YB Tony has no choice but to admit this success, against all odds”.
I responded that perhaps, Arul Kanda has forgotten that he has been forced to admit that the power plant assets which were acquired for RM12.1 billion were sold for a loss at RM9.83 billion. The proceeds were used to pay off RM950 million of the Federal Government’s emergency loan granted last year. However, USD3.5 billion (RM13.6 billion) worth of bonds which were raised to purchase these power plants remains outstanding.
Petaling Jaya Utara MP
DAP National Publicity Secretary