Lim Guan Eng told only half the story

Dato’ Lokman Adam

1. I refer to a press statement dated 27 May 2018 by the Minister of Finance. In his attempt to assign blame on Dato’ Sri Najib for 1MDB, he has, once again, only shared half the story.

2. In March 2015, barely a month or so after certain allegations were made relating to past 1MDB transactions, the Cabinet under the leadership of Dato’ Sri Najib requested the Auditor General Department to conduct a special audit on 1MDB and to present its findings to the bi-partisan Public Accounts Committee (PAC).

3. In July 2015, PDRM conducted a raid on 1MDB premises and seized substantially all company documents. The PDRM investigations are still ongoing.

4. The Auditor General highlighted many issues to the PAC, for example, weak governance, poor record keeping, no verification of fund investments, etc.

5. In April 2016, the PAC highlighted, amongst others, the excessive use of debt by 1MDB and potential wrongful actions by the previous 1MDB management.

6. PDRM was asked to further investigate Datuk Shahrol Halmi and relevant personnel within the past 1MDB management.

7. It is therefore clear that the previous government under Dato’ Sri Najib Tun Razak had already commenced investigations on 1MDB, which, for the record, are as yet ongoing.

8. At the same time, despite the issues concerning 1MDB and the ongoing investigations by PDRM, there was still a need to service debts and keep key projects such as TRX and the relocation of the Sg. Besi airbase on track.

9. Whilst the Minister of Finance listed a series of 1MDB-MOF transactions in his statement, he did not explain the basis or rationale behind the decisions made by the MOF.

10. For example, the Minister of Finance did not, from a legal and accounting perspective, explain why 1MDB transferred prime real estate assets to MOF at a nominal sum, whilst the debts still remain on 1MDB’s balance sheet.

11. The only logical answer, of course, is that MOF agreed to assume those liabilities, which provides stability and gives certainty for 1MDB to pay its debts.

12. The TRX project was well advanced, with committed local and international investors by the time it was transferred to MOF on 31 March 2017.

13. MOF commenced payment of 1MDB liabilities only in April 2017, after the asset transfer.

14. The Bandar Malaysia project was also transferred to MOF on 31 March 2017. The deposit sum of RM720 million paid by the former joint venture partner was in fact substantially utilised for the Sg Besi airbase relocation project and related expenses to expedite vacant possession of the land for development.

15. Accordingly, when the MOF, as the new project owner, made a decision in early May 2017 to terminate the joint venture arrangement, it was only correct for it to repay the deposit as it benefited from the work paid for by the former joint venture partner.

16. As can be seen from the above, there is much more to the 1MDB story than the one-sided narrative by the Minister of Finance.

17. Accordingly, I fully agree with the statement issued by Dato’ Sri Najib yesterday. Given the half stories by the Minister of Finance, it is best that the investigations on 1MDB continue per due process, and not be subject to a trial by media.