Tuesday, March 10, 2015

1MDB Bank Negara Approval:Are They Barking Up The Wrong Tree?

Hantu Laut

Jho Low Claimed The “PM/ FM” Gave Approval To Keep Bank Negara In The Dark On 1MDB Loan

I 'll not doubt there is something rotten down in 1MDB and the goings-on, therein, may not be known to the PM.

As I have suggested earlier forensic audit of the account be carried out to detect any fraudulent transactions, such audit should be carried out by our Auditor-General together with a reputable international auditing firm, which has in-depth knowledge of the world of international banking and finance, the reason being our AG office may not be familiar with those complicated cobwebbed financial instruments.

What I am going to say here is not in support of Jho Low, 1MDB or the PM, it's purely my personal opinion.

I suggest you guys check out BN (Bank Negara) objectives and regulations before you freak out on this highly politicised issue.

Jho Low may be right about BN approval not required as it is an offshore to offshore loan in foreign denominated currency (no ringgit involved), which in all likelihood is outside BN jurisdiction, therefore, BN approval is not necessary. It also makes sense that only MOF (Ministry of Finance) approval is required as 1MDB is wholly owned by the Malaysian government under the jurisdiction and control of Ministry of Finance, therefore, the company's BOD approval is required and MOF being the sole shareholder of 1MDB, its consent is also required.

Being an entity under MOF, who else can give approval on the matter if not the Minister of Finance, who also happened to be the Prime Minister? Don't forget by virtue of being the PM, he automatically become the de facto CEO of all state-owned companies.

Bank Negara would be more concerned if there were going to be foreign exchange involvement, or if the loan originated or domiciled in Malaysia, or if proceeds of the loan remitted back to Malaysia, where there would be greater impact on the local currency, economy and financial well being of the country if things go wrong.

1MDB would only need to inform BN and gets its approval if it raised foreign loans or issued bonds and bring back the proceeds to Malaysia. Its borrowings from domestic banks must be reported to BN, who as regulator can block or vary the huge borrowings if it's worried of undue impact on the credit and monetary system. 

As it is, the ringgit had already gone deep down south due to comprehensive politicising of the issue that have created skepticism and distrust in the Malaysian economy. Today, the ringgit is 3.69 to US$1.00 due to highly speculative and effective rumoring rather than fact-based economic indicators. Malaysia, is now rated one of the most politically unstable countries among investors and fund managers and it will get worse if no effort is taken to stabilise the very fluid political situation.

Most of the blame should fall squarely on the shoulder of PM Najib Razak as he was more concerned in keeping his popularity and hold on to power within his own party rather than to revive and strengthen the party popularity among the populace.

If they are so sure of the BN regulation, why SR (Sarawak Report) not named the source in Bank Negara who says to them such approval is required?

I think, Sarawak Report, Rafizi and the rest of the gang are barking up the wrong tree on the issue of Bank Negara's approval.


Anonymous said...

Pembangkang peduli apa negara lingkup kah, negara kena hina kah mereka dah cukup kaya.

Duit bertimbun2 cuma tak tunjuk kepada rakyat.

Semua auta, gila kuasa.

Kapla kasi potong sampai botak!

Purple Haze said...

The formation of 1MDB is dubious. Its 2 main assets are the TRX land and IPPs.

For the landed properties, they were revalued NOT in accordance with recognized accounting practices, more so when nothing has been built.

The IPPs have not been "relisted" yet, so no funds coming in to pay off debt.

It is a house of cards. The Opposition cannot be blamed for this one !