USD1.4 billion of UAE Govt money went missing? Also, WSJ confirms that Cayman and BSI "Units" are not worthless

I have been asked by many to comment on today's Wall Street Journal article titled "Malaysia’s 1MDB Fund Scandal Spreads to U.A.E." and The Malaysian Insider's related article "Abu Dhabi alleges US$1.4 billion from 1MDB missing, says WSJ".

The two articles alleges that Abu Dhabi Govt's sovereign fund IPIC cannot trace a USD1.4b payment from 1MDB to them.

These are my observations:

1) The Malaysian Insider lied again with their headline "Abu Dhabi alleges US$1.4 billion from 1MDB missing, says WSJ" - which is entirely incorrect.

The allegations that this money was missing came from "two people familiar with the matter" as reported by WSJ:

Ibrahim Al Abed, a spokesman for the U.A.E. the UAE's ambassador to the U.S., IPIC and Aabar didn’t respond to requests for comment on the transfers.

Therefore, TMI is wrong to say Abu Dhabi alleges money is missing as it is not from official govt sources. Even WSJ won't dare use such a misleading headline like TMI.

2) As this particular allegations impacts on both countries, we should await for official comment from Malaysia and Abu Dhabi Govt.

I wouldn't know for sure whether IPIC received the payment or not but I would be very surprised that they have not because:

• The "missing" money is related to the 2012 USD3.5b bond issue guaranteed by IPIC and if after 3 years, IPIC only recently found out USD1,4b was missing then I don't know what to say. Details of this 2012 bond and the terms and conditions were clearly stated in the 2014 Audited Financial accounts of IPIC.

• IPIC would be very foolish to take over interest payment (already done) for the USD3.5b bonds (which they will take over as part of the settlement agreement) and also very foolish to have paid USD1b cash to 1MDB in June this year if the money was missing.

You really have to question the competency of the UAE government if they could not detect for over 3 years that USD1.4 billion of their money went missing.

3) The WSJ report has confirmed that the so-called BSI/Cayman units are not worthless. 

WSJ has revealed that the PAC (including Tony Pua) were told that these disputed and supposedly worthless USD2.32b units are guaranteed by Aabar Corp, a part of the Abu Dhabi Govt since the year 2012 - a detail that was never revealed by Tony Pua, 1MDB or anyone for that matter.

I believe that 1MDB would have long wanted to say that these units are guaranteed by Abu Dhabi but was prevented so by confidentially agreements - especially since it was between two sovereign governments.

Their inability to publicly state this fact have allowed critics to attack 1MDB for years on these units and cayman funds.

I believe the June USD1billion payment from IPIC to 1MDB was related to these remaining units (majority of the USD2.32b untis were redeemed before this) which IPIC's unit Aabar guaranteed and IPIC made good on its guarantee with this payment - which essentially closes the case of the USD2.32b cayman investments and BSI units

And since these units are supposed to be the proceeds from the 1MDB-PetroSaudi joint-venture, this proves that no money was missing and gives credibility to 1MDB's claims that they made at least USD500m from the 2009 joint venture with PetroSaudi.

So, if no money was missing then how the heck did Jho Low or GoodStar "steal" USD1.83 billion from 1MDB?

Since the PAC were shown evidence of this Aabar guarantee, I am surprised that Tony Pua did not come out to apologize for saying the Cayman units were worthless.

Tony Pua already in trouble with the law over Justo-gate has remained that the 1MDB units are guaranteed by Aabar and not worthless

Perhaps he will say that he cannot comment on this as it was PAC confidential matter?

4) WSJ seems very determined to continue to link the USD681m payment into Prime Minister Najib accounts as money from 1MDB.

Despite an official MACC statement that the money was not from 1MDB and multiple statements from our ministers stating that the money was campaign contribution from a Middle East source, even in today's article WSJ tried to make this link to 1MDB.

Read why I think it is entirely possible that this came from a Middle East donor during the heady periods of Arab Spring and why the donor would want to remain anonymous:  Arab money and the Malaysian Spring?

In their July 2015 article which exposed the information that money had flowed into PM Najib's account, WSJ had tried to link the money to the USD3b bond issued in March 2013, a month before the money went into Najib's account.

Since that didn't work out well, WSJ is now trying to link the money from the 2012 USD3.5b bonds instead.

You really have to question the motives of WSJ of their continued efforts.

5) Confidential and official secrets of Malaysia continue to be deliberately leaked to foreign media which strongly indicates a conspiracy to topple PM Najib and Malaysia Government. 

I had questioned why were only a few pieces of a large investigation paper into 1MDB deliberately leaked to WSJ just mere days after UMNO postponed its party elections.  WSJ had confirmed that they received this selective info from unnamed government investigators.

These few pages just showed money flows into Najib account but do not show who gave the money (since revealed as a Middle East donor who wants to remain anonymous), whether it was allowed by UMNO rules that their president can hold money in trust for the party (yes, it's in their party rules) and where these funds are used and where it went to - details which are fully available to the investigators. 

But strangely, only a few pages of very selective information was leaked to WSJ just days after the UMNO elections were announced to be postponed to after GE14.

And again in today's report, Wall Street Journal says it has reviewed the interim Auditor-General report into 1MDB which was completed and released in late July. This document is highly confidential and available to PAC and MOF sources only.

How the heck did foreign media get their hands on this protected document that was just released not too long ago?

Who within government is conspiring with foreigners to try to discredit and bring down our government?

If it is proven that PM Najib committed a crime by taking money from 1MDB, he should go to jail.

But if it is proven that he did not commit any crime and the money was not from 1MDB, what should the government do with these people who keeps releasing selected confidential information to foreign media which badly discredits our country and destabilizes our economy?

What action should we take on these malicious people?

Read what are the implications to Malaysia and the world, if the USD681m is indeed from 1MDB: What if Tun M is correct that the RM2.6b is from 1MDB?

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Update: 1MDB has just issued an official statement on this.

1MDB Stands by Its Audited Accounts 

We refer to a biased article by the Wall Street Journal today relating to US$1.4 billion of payments made by 1MDB. We note that the Wall Street Journal does not name its source or provide any proof of the unproven allegations it is making, thereby seriously discrediting its sensationalist story. 

1MDB cannot speak on behalf of Aabar or IPIC nor can we comment on the accounting arrangements of third parties. What we can confirm is that the 1MDB audited financial statements clearly describe the amount and purpose of the payments, which for the avoidance of doubt, is structured as a deposit (i.e. a financial asset belonging to 1MDB and not an expense to 1MDB). 

Secondly, based on those payments, we can confirm that IPIC did provide and continues to provide, guarantees for the principal and interest of 2 x US$1.75 billion bonds issued by 1MDB, with a total principal and interest amount of approximately US$5.5 billion. 

Thirdly, we can confirm that 1MDB auditors, Deloitte, made specific and detailed enquiries on these payments prior to signing off on the 1MDB audited accounts. 

Fourthly, Deloitte has strongly defended its methodology and audit process of 1MDB at the Public Accounts Committee (PAC) hearings, a bipartisan select committee of the Malaysian Parliament. Accordingly, the Wall Street Journal is wrong to state “it isn’t clear what happened to the funds”, at least not from a 1MDB perspective. 

More importantly, we are shocked that a hitherto reputable publisher such as the Wall Street Journal would make use of clearly confidential information in its reporting. We refer specifically to the WSJ confirming it has reviewed a “transcript of the proceedings”, from a parliamentary committee probing 1MDB, of which the only possible source is the PAC hearings on 1MDB. 

The Standing Orders of the Malaysian Parliament very clearly states that “the evidence taken before any Select Committee and any documents presented to such Committee shall not be published by any member of such Committee, or by any other person, before the Committee has presented its Report to the House”. 

The actions by Wall Street Journal are a potential breach of Malaysian law by a supposedly respectable foreign publication. We are further concerned as to who involved in the PAC hearings may have leaked this transcript, which is clearly an attempt to prejudice the PAC investigations and deny 1MDB its right to due process as provided for by the laws of Malaysia. 

1MDB strongly urges the relevant authorities to investigate this matter thoroughly and take all requisite action to preserve the process integrity and Standing Orders of the Malaysian Parliament.