The Prime Minister, Datuk Seri Najib Razak said yesterday a failed initial public offering (IPO) exercise, as a result of being “attacked”, was the main reason why 1Malaysia Development Bhd (1MDB) encountered problems.
He said 1MDB used the debt funding approach to operate its business, which required an IPO to be undertaken in the shortest possible time. The authorities did not foresee that 1MDB would come under relentless “attacks”, which resulted in the IPO exercise could not be carried out, hence the cashflow problems.
Was this the real reason why 1MDB had exploded to become the nation’s first global financial scandal, keeping the nation constantly in the international limelight for massive transborder financial frauds, irregularities and money-laundering?
Or was the Economic Planning Minister, Datuk Sri Abdul Wahid Omar more to the point when he admitted last month that 1MDB model of low capitalization and huge borrowings was unsustainable from the very start.
What was the “original sin” of the 1MDB global financial scandal – the IPO failure, the unsustainable model of low capitalization and huge borrowings or something more fundamental, conceived right from the beginning as a mega global scam that has triggered investigations by several countries on international embezzlement and money-laundering to the tune of some USD11 billion stretching from Singapore to the United States?
In the past fortnight, while Najib has led the campaign in the Sarawak state elections to rain money throughout the state, Malaysia has not ceased to be at the receiving end of adverse international developments, like being named number two by The Economist in its second index of crony capitalism, just behind Russia – after being cited by the international website, foreignpolicy.com’s as the host country for the third “world’s worst corruption scandal of 2015” and TIME magazine’s ranking of Malaysia as the second worst example of global corruption in March.
Will the RM50 billion 1MDB scandal be the top agenda of Parliament when it reconvenes on Monday on 16th May or will Parliament “sleep-walk” for the eight parliamentary sittings as if the first global scandal does not exist in Malaysia and that it was the whole world which is hallucinating about the 1MDB scandal?
The Prime Minister should present a White Paper on the 1MDB scandal, taking into account the report of the Public Accounts Committee on the 1MDB, stating the government’s position on the nation’s first global scandal, and to set aside at least three days for debate on the Government White Paper on 1MDB.
He goes on TV and said 1MDB failed because it was too leveraged but failed because it could not go IPO because of the opposition tells you he is determined to keep lying counting on the ignorance or self interest he will continue to buy in the rural areas and Sabah and Sarawak.
Najib has painted himself in a corner he cannot back down even a bit, not even if it sinks the entire country or his party, which he believes is not at stake. Economic wise, Najib is right, 1MDB does not sink the country BUT structurally, institutionally, he is wrong. He has already condemned us all eventually, short term economics is irrelevant.