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.
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