Three camps on 1MDB scandal and Malaysia as global kleptocracy in the UMNO elections
Former Prime Minister Datuk Seri Najib Razak is so predictable but he is getting to be slow-witted and slow-paced.
I told my staff yesterday that Najib was sure to come out with a clarification of his Reuters interview on Wednesday and sure he did – but very much later than I had expected. He seems to have become slow-witted and slow-paced, as I had expected his clarification by mid-day yesterday and not till the evening at 6 to 7 pm.
And what a clarification – one of its kind, for it is a clarification which does not clarify but further obfuscates!
Najib denies blaming the 1MDB board for the financial scandal that plagued the state development fund.
His spokesman said Najib was not shifting the blame to the board as reported in the Reuters interview, and “clarified” that what he said was any board had a fiduciary duty to act in best interests, and that the 1MDB board had a duty and responsibility to advise him on the running of the investment fund.
His faceless and nameless spokesman said: “He did not at any time during the interview said that the 1MDB board was to be blame for what had happened.”
Najib should stop going round in circles and get to the point.
Did he or did he not say that he would have acted if he knew 1MDB fund were being misappropriated, and that it was the fiduciary duty of the 1MDB board and management to do the right thing to follow the law and that if they were in the know that something was not right, then it was incumbent upon them to tell him?
Was Najib passing the buck of the responsibility of the 1MDB scandal to the 1MDB board and management, clearing himself of all responsibility, or was he not doing so – not blaming the 1MDB Board and Management of failing their fiduciary duty to do the right thing and follow the law?
If he was not blaming the 1MDB Board and Management for the 1MDB scandal, what is all the hullabaloo about the Reuters interview about?
If the 1MDB Board and Management had performed their fiduciary duty to do the right thing and follow the law, and there was no misappropriation of 1MDB funds, then what is the need to mention the subject?
Najib talks so much about the fiduciary duty of the 1MDB Board and Management to do the right thing and follow the law – what about his own fiduciary duty as the final decision-maker in 1MDB, in addition to his dual capacities as Finance Minister and Prime Minister?
Lets take an example.
Who was responsible for making former Goldman Sachs banker Tim Leissner, who had been linked to the 1MDB scandal, an instant billionaire by approving RM1.8 billion commissions to Leissner or 9% of the three 1MDB bonds totally US$6.5 billion in 2012/3 – which was several times the industry average for underwriting risky bonds?
Recently, it was reported that Malaysia is considering asking the U.S. Department of Justice (DoJ) to get Goldman Sachs to return nearly US$600 million in fees it earned from bonds raised for scandal-tainted 1Malaysia Development Berhad (1MDB).
Leissner has been barred from the US securities industry for failing to provide documents for 1MDB investigations.
The US Financial Industry Regulatory Authority (Finra) said the indefinite ban on Leissner was issued on Sept 11 last year as he did not respond to requests for documents and other information on 1MDB investigations.
The US industry body was probing Leissner’s departure from Goldman Sachs in early 2016, in particular into a reference letter he allegedly wrote during his time with the firm.
Leissner, who was formerly Goldman Sachs’ Southeast Asia chairperson, was an adviser to 1MDB and had allegedly issued an unauthorised letter in June 2015 to a financial institution in Luxembourg, vouching for controversial entrepreneur Jho Low, a key figure in the scandal surrounding the Malaysian sovereign wealth fund.
Goldman Sachs suspended him, and he later quit the firm. Subsequently, the Monetary Authority of Singapore (MAS) issued a 10-year ban against him trading in the country, effective March 13, 2017.
Malaysians are entitled to know whether Najib was responsible for approving US$593 million (or some RM1.8 billion) profits to Leissner or 9% of the three 1MDB bonds totally US$6.5 billion in 2012/3 – which is several times the industry average for underwriting risky bonds. If Najib was not the final approving authority, who was?
Najib cannot really disclaim responsibility for creating an instant American billionaire in the 1MDB scandal because under Article 117 of the 1MDB Memorandum and Articles of Association (M&A), the Prime Minister was the ultimate authority who exercised final direct control of 1MDB, as Article 117 required all major decisions of the company involving financial commitment (including investment), restructuring and major appointments to have the written authorization from the Prime Minister.
Under Article 117, the Prime Minister had powers exceeding those of the Advisory Board, the Board of Directors and the Top Management of 1MDB all added together, being the final approving authority for all 1MDB decisions, deals, investments and transactions.
Is Najib seriously suggesting at this late day of the 1MDB scandal (i) that he was not aware of any misappropriation of 1MDB funds; and (2) that he would have acted if he knew that 1MDB funds were being misappropriated?
Let us take another example – the disappearance of Nik Faisal Ariff Kamil from Malaysia after the 14GE on May 9, 2018.
As reported by The Malaysian Insight, nearly every day before May 9, Nik Faisal Ariff Kamil was a feature at shopping complexes and cafes in Bangsar, the middle-class suburb in Kuala Lumpur.
When Najib Razak and Barisan Nasional lost in the 14GE , “the urbane former chief executive officer of SRC International hurriedly packed his bags and fled to Indonesia”.
Nik Faisal is a crucial witness in the 1MDB investigations. As the CEO of SRC International, he held the power of attorney for Najib – which meant that Najib legally authorised Nik Faisal to represent him and act on his behalf.
Why didn’t Najib direct Nik Faisal to stay in Malaysia and to co-operate with the authorities in their SRC and 1MDB investigations?
The upcoming UMNO party elections will be an eye-opener for there will be three factions – firstly, those who want to minimize or even whitewash the 1MDB scandal; secondly, those who want to pretend the 1MDB scandal is not a problem and need not be addressed; and thirdly, those who want UMNO and UMNO leaderships to admit responsibility for the 1MDB scandal.
The UMNO Strategic Communications Unit is busy plugging the first line. It will be interesting to see how the 1MDB scandal and Najib’s transforming Malaysia into a global kleptocracy pan out in the UMNO Assemblies at the end of the month.