1MDB says disappointed with 'sloppy' reports in The Star

A man pushes his bike past 1Malaysia Development Berhad (1MDB) flagship Tun Razak Exchange development in Kuala Lumpur, July 3, 2015. — Reuters pic
A man pushes his bike past 1Malaysia Development Berhad (1MDB) flagship Tun Razak Exchange development in Kuala Lumpur, July 3, 2015. — Reuters pic

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KUALA LUMPUR, July 11 — 1Malaysia Development Berhad (1MDB) labelled as inaccurate today two reports in The Star newspaper — one that touched on the firm's financial position and a second article that suggested irregularities in its aborted 2009 joint venture with PetroSaudi International (PSI).

In a brief statement, 1MDB expressed its disappointment in what it described as “sloppy reporting” by a renowned media organisation like The Star, claiming that the assertions made by the unnamed investigators in the newspaper's report were unsubstantiated.

In one article today, The Star, quoting an unnamed investigator, reported that when 1MDB's now-aborted joint venture deal with PetroSaudi International was struck in September 2009, there had been “no document related to the existence of assets and valuation of PetroSaudi Holdings (Cayman).”"

“This is blatantly incorrect. There was a valuation report prepared when the investment was made and 1MDB has in fact submitted the same report to the lawful authorities for their review,” 1MDB insisted in its reply.

The firm did not, however, confirm or deny the same article's claim that it was the rushed signing of the deal that had led to the resignations of former 1MDB chairman Datuk Mohd Bakke Salleh and board member Tan Sri Azlan Mohd Zainol.

According to daily, the duo quit after US$700 million (RM2.6 billion) that was meant for the 1MDB-PSI joint venture were diverted to another company without approval from the 1MDB board.

Quoting an investigator, the report said the board had directed that the money be returned to the JV company “but no action was taken.”

Bakke subsequently resigned on October 19, 2009, while Azlan left the board earlier this year on January 11, it said.

Again quoting investigators, the English daily said board members also felt the agreement with PSI to set up the JV firm was signed too hastily.

The report said the board was informed of the deal on September 18, 2009, and 10 days later on September 28, the agreement was inked with PetroSaudi Holdings (Cayman) Ltd, a wholly-owned subsidiary of PSI.

In another article on the 1MDB controversy today, The Star quoted 1MDB investigators as saying that almost RM13 billion of the debt-riddled firm's assets currently classified as available-for-sale cannot be so easily liquidated.

According to the daily, 1MDB currently has RM19.5 billion in current assets — RM3.85 billion in the form of cash and the remainder in assets for sale.

In its denial, however, 1MDB said the assertion was “clearly wrong” as the notes on 1MDB's audited March 30, 2014, financial statement describe how US$1.22 billion (RM4.6 billion) of its assets have already been liquidated and cash proceeds utilised.

“Further, it is a well known fact that a number of lawful authorities are conducting investigations on 1MDB and no final determination has yet to be made.

“Such sloppy reporting by The Star, a regulated and licensed newspaper, is disappointing,” it said.

The state-owned investment firm then pointed out that Public Accounts Committee (PAC) chairman Datuk Nur Jazlan Mohamed, upon receiving the National Audit Department's interim report, had said that “there is nothing suspicious” in the said report.

“It is, therefore, clear there is no truth to allegations that 'RM 42 billion' or 'RM 16 billion' is missing, an allegation that has been repeated by various parties,” 1MDB said, referring to oft-repeated allegations on its reported RM42 billion debt pile.

1MDB is currently under probe for alleged impropriety by at least three authorities, including Parliament's Public Accounts Committee (PAC), the Auditor-General and the police.

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