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Friday 13 January 2017

JHO LOW, ERIC TAN and the Arabs

A piece of news that has escaped many people is that on September 1st, 2016,  The Wall Street Journal (WSJ) finally admitted that at least USD200 million into Najib's accounts came from Saudi Arabia sources and at least USD80 million can be directly traced to the Ministry of Finance of Saudi Arabia.


WSJ also said that USD20 million into Najib's account came from the USD24 million transferred to Prince Faisal bin Abdullah, governor of Riyadh and 7th son of King Abdullah.

I have no idea why the Governor of Riyadh and Saudi Arabia's Ministry of Finance would help Najib with this money.

WSJ also alleged that from Aabar BVI, about US$637 million went to a company called Blackstone Asia Real Estate Partners in the British Virgin Islands, where it was POOLED with other funds and then a total of USD$170 million to Mr. Najib’s bank accounts in multiple transactions during 2012, bank transfer documents show.

ABC had previously reported that these transfers from BlackStone were backed by a 2011 letter from one Prince Saud AbdulAziz Majid Al Saud from Saudi Arabia who appears to be the then Governor of Madinah Province.

These Aabar BVI funds allegedly came from USD1.4 billion collateral for the USD3.5 billion 1MDB bonds guaranteed by IPIC. This guarantee was never disputed but IPIC had recently denied receiving these collateral - meaning they had guaranteed the USD3.5 billion bonds for fun.

Khadem al Qubasi the shareholder of Aabar BVI's boss is also Sheikh Mansour and is also the chairman of IPIC's Chairman.

It is still not clear why IPIC, Sheikh Mansour and Saudi's Price Saud would help Najib with this USD170 million transfer though.

This revelation of Saudi Arabia's Ministry of Finance adds yet another level of intrigue and mystery as this means that the USA's DOJ and WSJ have now accused the governments and high officials and royalties for three different Muslim-majority nations of conspiring to help Najib with funds.

I suspect the real story is more interesting and more complicated than this. 

JHO LOW and the Arabs

A point also missed out by most people or deliberately not highlighted is that Jho Low graduated from the Harrow School in England and The Wharton School of Business, University of Pennsylvania, in the United States.

A person who is fluent in Arabic, he tells of how at these schools he met and befriended Arab royalty, describing the relationship as being important since how they became friends at such a young age created a great amount of trust between them. He even started a US$25 million investment fund at school with investments from his Arab friends.

So, two things about Jho Low are:
1) His job was always a fund manager
2) He was closer to the Arabs at a much younger age than he is close to PM Najib or his family.

In fact, even before Najib became the Prime Minister or even the Finance Minister in late 2008, Jho Low had been dealing on behalf of the Arabs - a fact that Jho Low had stressed multiple times before on his links while in school.

For example, The Edge reported that in  late 2006, the then 26-year-old Jho Low approached Khazanah Nasional seeking support for Kuwait Finance House’s bid for RHB Bank Bhd. Khazanah had a 30% stake in RHB Bank at the time and how he then made RM400 million in 2007 in flipping Iskandar, Johor land by bringing in the Abu Dhabi state-owned Mubadala Development Co.

Later on in May 2008, Jho Low would be successful in facilitating the purchase of a 25% stake in RHB from EPF by Abu Dhabi's Abu Dhabi Commercial Bank for for RM3.876bn (USD1.23bn then).

The price of MYR7.20 a share represents a 36 percent premium (3.1 times book value) to the bank's current price. Based on the purchase price, the deal is the 'largest investment to date of a Middle East investor into the Malaysian financial sector,' said Employees Provident Fund (EPF), 

This RM3.876b sales allowed EPF to make RM2.16b profits in less than two years or more than double the RM1.715b it effectively paid for the 25% stake or a 126% profit in two years. EPF had bought a 32.8% stake in EPF a little less than a year ago for RM2.25 billion.
Therefore, Jho Low was acting on behalf of the Arabs and doing fund management/deal-making even before Najib became Finance Minister or Prime Minister.

In a sense twist of irony, based on correspondences they had found in the Justo files, Saraawak Report confirmed the close ties of Jho Low with the Saudi Arabians in their report dated 2nd January 2016 titled "How Najib Used PetroSaudi To Wage Black Propaganda Against Anwar -EXCLUSIVE" where he detailed how Jho Low was the man who bridged the Saudi royalty with Najib.

Since Jho Low was the one with the Arab royalty relationships, I do not find it surprising that he is used as a go-between to convey political funds, support and donations from the Middle East to Najib.

The fact that Wall Street Journal had reported that a substantial amount of money had even come direct from the Saudi Ministry of Finance's account means that the Saudis had certainly supported or assisted Najib to fight against the Colour revolution during the crucial Arab Spring period (Read Arab money and the Malaysian Spring?)
The controversial transfer alleged by WSJ into Najib's account was the USD681 million (the famous RM2.6 billion) from Tanore just before GE13 - where USD620 million was returned - the balance remaining works out to be only RM50 million after exchange rates differences and was supposedly spent on party matters and various charitable causes and programmes .

This money came from funds guaranteed by Aabar BVI from the USD3 billion 1MDB bonds raised in 2013 after the Crown Prince of Abu Dhabi HRH Sheikh Mohammed bin Zayed Al Nahyan came to Malaysia to sign a JV with 1MDB.

Recall that our AG had said all the transfers including the USD681 million were backed by a letter from various Saudi royalty and that MACC had interviewed all the witnesses.

For the last transfer, it is also not clear why Crown Prince Sheikh Mohammed and Khadem's Aabar BVI would assist Najib with this transfer.

Eric Tan

As for Tanore's Eric Tan, he was previously described as a proxy. Now there are allegations that Eric Tan is a Jho Low's proxy.  However, it is not clear who he is a proxy for. It could very well be a medium for the Arabs who wishes anonymity while Jho Low's role is to make sure that money reaches the PM's accounts. 

But for sure, Jho Low is NOT Eric Tan. Would you think that Singapore would allow a fake or non-existent person to open a bank account? 

A point to note is that these transfers would not have been possible without the assistance of Khadem Al-Qubasi, the former Managing Director of IPIC and Chairman of Aabar Investments PJS.
H.E Khadem Abdulla Kadem Butti Al-Qubaisi served as Managing Director, Chief Executive, and Director at International Petroleum Investment Company PJSC, since May 2007.
He is a close confidante of IPIC Chairman Sheikh Mansour, who is the deputy prime minister of the United Arab Emirates, minister of presidential affairs and member of the ruling family of Abu Dhabi. He is the half brother of the current President of UAE, Khalifa bin Zayed Al Nahyan.
Khadem was named at number 14th spot in Gulf Magazine’s 2014 list of the Top 100 World’s Most Influential Arabs, and included in the Oil & Gas Power Middle East top 50 in 2011.
He received the Arabian Businessman of the Year for 2009 in the UAE, and also received the coveted #1 Award as the ICIS Power Player of the Year 2009.
He served as the Managing Director of IPIC from 2007 to 2015 and served as the Chairman of Aabar Investments PJSC from 2012 to 2015..
H.E. Al-Qubaisi served as Managing Director at National Central Cooling Company PJSC since May 2011.
He serves as Chairman of Compania Espanola de Petroleos S.A. and Aabar Properties LLC. H.E. Al-Qubaisi serves as Co-Chairman of First Energy Bank. He serves as the Chairman of First Gulf Bank PJSC.
He has been the Chairman of Supervisory Board of NOVA Chemicals Corporation since January 1, 2011. He served as the Chairman of Supervisory Board of Arabtec Holding P.J.S.C., since May 2012.
He served as the Chairman of First Energy Bank B.S.C.(c) until March 2016. He served as the Chairman of Arabtec Holding P.J.S.C. from May 08, 2012 to May 2015. He served as the Chairman of the Board at NOVA Chemicals Inc.
He served as the Chairman of the Board at NOVA Chemicals Corporation since January 01, 2011 and served as its Director from January 01, 2011 to April 22, 2015.
He served as the Chairman of Hakkasan Limited until April 14, 2016. He served as the Chairman of Supervisory Board at Borealis AG from March 5, 2010 to April 2015.
He served as the Chairman of National Central Cooling Company PJSC and Falcon Private Bank Ltd. He served as Chairman of Abu Dhabi National Takaful Company P.S.C. until August 5, 2014.
He served as the Chairman of Gulf Energy Maritime PJSC until June 2008. He has been a Deputy Chairman of Supervisory Board at OMV Bulgaria OOD since May 2010. He has been a Vice Chairman of Duqm Refinery and Petrochemical Industries LLC since July 2012.
He served as Deputy Chairman of the Board of Supervisory Board of OMV Aktiengesellschaft from May 26, 2010 to May 10, 2012 and served as its Member of Supervisory Board. He served as Vice Chairman of Supervisory Board at Borealis AG.
He served as Vice Chairman of UniCredit S.p.A. from May 2012 to October 2012 and served as its Director until October 2012. He served as a Member of Supervisory Board at Borealis AG from March 5, 2010 to April 2015.
He served as a Member of Supervisory Board of AMI Agrolinz Melamine International GmbH and Borealis Agrolinz Melamine GmbH. H.E. Al-Qubaisi serves as a Director of ChemaWEyaat and Board Member of Emirates Investment Authority.
He serves as a Director of Abu Dhabi National Chemicals Company. He served as a Director of Arabtec Holding P.J.S.C., from April 28, 2012 to May 2015. H.E. Al-Qubaisi served as a Director of First Gulf Bank PJSC, National Central Cooling Company PJSC and Hyundai Oilbank Co., Ltd.
It is almost unthinkable that a person such as this would assist our PM to misappropriate money - especially since he was holding a couple of billion of UK Pounds of Barclay Banks shares in his own name in 2008 (before 1MDB even existed or had any money).

Although Khadem and his ex-CEO Mohamed Ahmed Badawy Al-Husseiny is also named as a subject of the US Department of Justice civil suit along with Jho Low and despite multiple media reports saying that the UAE govt had arrested Khadem, it is strange that neither of them has ever been charged for any crime by UAE - even until now.

Don't you find it strange that these two people who allegedly faked a state-owned company's name in the BVI and supposedly misappropriated billions are also not charged by UAE?

Another  point to note that at the point of transfers, the money does not legally belong to 1MDB anymore but to various entities related to the foreign governments and officials.

It is still not clear to most people why would Najib want to allegedly steal money that is borrowed. Money that is borrowed would eventually have to be repaid. If someone really wanted to make money, it would have been easier to do lop-sided Independent Power Plant deals at the expense of the rakyat like a past Prime Minister where you could be guaranteed at least RM1 billion per year.

Further to this, it is also not clear why would anyone want to transfer "stolen money" that is already safely and anonymously overseas and then bother to transfer it back locally to an account in his own name where dozens of people from Ambank to Bank Negara would know about this.

Even stranger is that this money allegedly stolen is also not spent on himself but given to various NGOs and for political purposes.

Muhyiddin has never commented what he meant by what he said in this September 2015 UMNO supreme council meeting - right after news broke of Najib's RM2.6 billion in his personal accounts.



Wall Street Journal in their report titled "1MDB Probe Shows Malaysian Leader Najib Spent Millions on Luxury Goods" where they reported that Accounts of prime minister paid out US$15 million for clothes, jewelry and a car.
"Of the apparent personal spending, one of the most regular recipients of funds from Mr. Najib’s accounts was Jakel Trading Bhd., a Malaysian luxury clothing retailer. Between 2011 and 2014, Mr. Najib transferred over US$14 million to Jakel, according to the documents. 
There was a recorded expenditure on June 28, 2011, at Signature Exotic Cars, a car dealership in Kuala Lumpur, for US$56,000. Signature’s managing director, Daniel Lim, didn’t respond to a request for comment." reported WSJ.
I think most Malaysians would know that Jakel Trading is nowhere near to being a luxury clothing retailer. They are famous for cloth, for prayer mats and for Islamic clothing. It is well-recorded that various NGOs and UMNO itself had regularly contributed prayer mats and clothing to various mosques around the country during that period. 



To claim that Najib spent US$15 million for luxury clothing for himself or even his family from Jakel is laughable - not to mention downright malicious by WSJ.

As for the "luxury car" that Najib bought for US$56,000, perhaps WSJ is not aware of car prices in Malaysia. On June 2011, US$56,000 is equivalent to RM3,003 or RM169,680 - perhaps enough to get a second-hand Toyota Alphard or a new Honda Accord. Not quite sure if this qualifies as a luxury car.

A more plausible explanation is that the car is for a gift to a charity or for use to transport goods.


Given the above, WSJ's accusations does not make sense and that PM Najib's continued assertion that he did not personally benefit from the RM2.6 billion seems likely.

Given such relentless and lop-sided reporting by WSJ  and Sarawak Report, the revelation that the Ministry of Finance of Saudi had transferred huge sums of money directly into Najib's accounts, the fact that so many royal families and VIPs in the Middle East are involved in dealing with Najib over the 1MDB and RM2.6 billion issue added by the fact that the reason expose that Soros and his Open Society Foundation was principally involved in the "Malaysian Program" with Soros himself having a personal interest, I can't help feeling that there is more than meets the eye when it comes to 1MDB and the Najib's RM2.6 billion issue.

In fact, an even more ominous clue is from the Wikileaks exposed document from Soros to the USA Government.

This document as part of the "Podesta emails" Wikileaks expose that got Hillary Clinton investigated by the FBI and which contributed to her loss in the presidential elections.

These 3 pages are excerpts from that document.





This is on the last page (pg 14) of the secret document that George Soros used in March 2016 where he personally lobbied the US govt to disassociate themselves from Najib.

Four months later, the DOJ took civil action related to 1MDB.

Other than saying that Najib is corrupt, a Islamic extremist and too close to China, they also suggested that Najib murdered Kevin Morais and dump his body in a cement drum.

There were 3 major demands by Soros to the USA government.

1) Make the TIP Report independent of political designs
2) Dissociate from Najib…soon
3) Demand Anwar’s release

Under point 3, Soros clearly said that Anwar would be instrumental as the new leader of Malaysia if Najib falls.  (So, who says that Soros and the OSF "Malaysia Program" is not political? )

And if Najib doesn't fall, Anwar can provide the USA Govt with "insight and strategic leverage" on Malaysia.

Which basically means that Anwar can advise the USA Govt how to deal with Malaysia for the USA Govt's benefit.

I don't know about you but for Soros to outright say something like this smacks of treachery to me.

Soros also claims that Najib has perverted Islam, wants to implement Hudud nationwide and is a supporter of the IS militants and extremism!

Obviously Soros is telling lies to the USA Govt to pressure them to act against Najib.
Najib is known widely as a moderate and is an assassination target for IS. Our govt had also arrested more than a hundred people suspected of IS activities or planning to go overseas to fight.

Soros also says that Najib will not be too loyal to the USA since Malaysia adopts a neutral policy and that Najib is getting too close to China now.

This document was part of the "Podesta emails" Wikileaks expose that got Hillary Clinton investigated by the FBI and which contributed to her loss in the presidential elections.



On top of this, it must be noted that it is Mahathir's men in Khairuddin Abu Hassan and also Matthias Chang who were the ones who made all those reports in the Swiss, Singapore, Hong Kong and USA government that made these investigators look into the 1MDB issue.

So far, Singapore has been active in their investigations but between the USA and China, we know who Singapore is more loyal too.

Certainly the political intrigue and power struggle is not just local anymore but has taken on a geo-political dimension.

Time will tell who the real thieves or traitors of Malaysia are.

In the meantime, 1MDB is well on its way to recovery and may prove to be a success soon after its restructuring and transfer of its various operating units to the Ministry of Finance.

On top of the various CSR efforts, one thing that local media seldom (Sarawak Report or MalaysiaKini has never mentioned this) is the 8 military bases that 1MDB is paying for and developing. These are now all close to completion.





Monday 2 January 2017

A short note on FELDA

Last week, Rafizi Ramli released the financial statements for Lembaga Kemajuan Tanah Persekutuan (FELDA) for just two years 2013 and 2014 and shouted that FELDA made a big loss of RM1.9 billion in 2013 and another RM1 billion loss in 2014 - which he then suggested is evidence that FELDA will soon go bankrupt.

What about the years 2012 and 2011? Why only 2013 and 2014.

Here it is:


Unsurprisingly, Rafiz did not reveal the statements for 2011 and 2012 - where FELDA made a small profit in 2011 but a massive RM5.7 billion profit in 2012.  

Very sneaky of Rafizi. Big losses he reports but even bigger profits, he keeps quiet.

This big profit is due to the listing of FGV, where FELDA received quite a lot of cash and also recognized the Land Lease Agreement (LLA) of RM5 billion.

This 99-year LLA gives FGV to lease Felda land from FELDA starting from 2012 when FGV listed.

Under the LLA, a hefty payment of about RM250mil per year has to be paid to Felda, which FGV has been paying on a quarterly basis.

In addition, FGV is required to pay 15% profit sharing out of its plantation profits to Felda.

This means that whether FGV makes profit or losses OVERALL, FELDA gets paid a lot of money every year - at least RM250mil per year plus 15% of operational profits.

You would also notice that FELDA's revenues have gone up from RM106 million in 2012 to RM420 million in 2014 - this is due to those LLA payments.

The LLA is a strange arrangement that penalizes FGV and benefits FELDA when palm oil prices increases or production increases as FGV has to increase this LLA liability when this happens - which drags down earnings.

FGV must be the only business in Malaysia that gets penalized when the selling price of their product increases or when their production increases.

To be sure, FGV has been operationally profitable every single quarter. It is only after taking into account this LLA and other one-off write that FGV has reported a loss for some quarters.

The LLA liability is an accounting charge that moves up and down and can significantly affect FGV's reported results.

For example, in FGV's Q4 2014 result, “, without the LLA effect, FGV’s plantation profits would have been doubled for the third quarter under review,”

This gives a misleading view of FGV's yearly results - hence FGV wants to re-structure and re-negotiate this LLA:

The LLA is an unique agreement that goes up and down depending on various factors including price of Crude Palm Oil (CPO).

Here is a short video which explains how the LLA works:


When CPO prices goes down, FGV reduces the LLA liability to FELDA which means FGV owes FELDA less money.

Since 2013 and 2014 were years when the CPO price dropped, the liability from FGV to FELDA was reduced these two years - hence causing FELDA to also recognize substantial losses in 2013 and 2014.

The other thing you would notice is that FELDA's losses in 2013 and 2014 was also due to big payments for replanting and also for settlers welfare - including housing.

FELDA, being a govt statuary body uses a modified cash basis accounting standard - as opposed to a pure accrual accounting as most private or listed company practices.

This means that FELDA's accounts treat replanting payments as an expense for the year - and hence a loss.

A private company would treat this replanting payments as an investment instead of expense (or loss) which increases the "Biological Asset" in their balance sheet. 

A legacy problem that needed urgent correction  

Historical statistics released by the USA indicate that Malaysian palm oil yields have typically appreciated over time, with the strongest period of growth occurring between 1998-2008 when yields increased by approximately 4%annually. 

Malaysian Palm Oil yield started to drop 

As you see in the graph, in 2009 an unexpected break in the long-term national growth pattern occurred where palm oil yields started dropping.

Oil palm is a perennial crop, with trees potentially producing economically viable volumes of fresh fruit bunches (FFB) over a lifespan of 30 years or so. Peak crop yields are achieved from the age of 9-18, and gradually decline thereafter.

In 2009, it was estimated that 65% of Malaysia’s total oil palm area was between the ages of 9-28+, while 26% was at least 20-28+ years old.

Due to neglect from a past prime minister more interested in monolith monuments and building cars, FELDA's problem was worse than the industry - with more than 50% of their palm oil trees then older than 21 years old. 
Age profile of FGV's palm oil trees.

This means that more than 50% of trees would no longer be economically viable 9 years later by the year 2018 - potentially affecting the livelihoods of hundreds of thousands of people.

So, if you were a responsible Prime Minister and the price of palm oil was high then, what would you do?

You would raise as much money as you can - by listing a part of the company to raise funds or borrow when the price of palm oil is highest.

This would be used to fund a massive and costly re-planting exercise and also acquire younger plantations for Felda in order to reduce the overall age profile of your plantations.

You will also use new high yielding planting materials to boost oil yields which are capable of doubling oil yields.

Just like harm was done due to neglect of replanting by a previous Prime Minister that will be known a decade later when the trees die, good that is done by a current Prime Minister will only be known later when the new plants start producing fruit bunches in year 9.

You suffer a bit now so your future is secure rather than have no future if the previous trend persisted.

Facts , figures and history don't lie.

See for yourself how fast the age profile of trees for FGV has come down since 2012.
I had also previously shared that due to past neglect, a big percentage of FELDA's trees were old and would soon be no longer economical as they would produce less oil.

Certainly due to legacy issued and history, FELDA's problems are big and management could be better but FELDA is making positive steps to resolve this.

However, I am confident that the government knows what they are doing and will address these problems - which will place FELDA and its settlers on an even stronger footing for the future.