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Tun Mahathir is getting strong public support because he speaks in lay men terms whereas people answering for 1MDB uses financial jargon.
HERE have been too much debates and accusations on the social media on the biggest financial scandal in Malaysia, 1MDB. It has reached a stage where too many are making premature conclusions or accusations that are not backed by credible information or substantive comprehension of the technical jargons surrounding the mechanism of financial transactions. I have been quite silent on this matter because of the wait for results from audit by the Auditor General. However, I fear detailed information from audit for lay men's consumption will come in too late despite the appropriate behaviour is to wait. People do not care about facts it seems. Only perception holds the game. Lay men need to be managed while waiting for the full details. Hence, my 2 cents worth of an attempt to promote a balanced thinking process as follows:
1. Audit is rigorous. Have you ever read Auditing Standards or at least look at an audit programme in an audit firm? Deloitte has damn good auditors from all over the world at senior level to come to Malaysia just to look at 1MDB - So I was unofficially told. I do not believe non-Malaysian auditors would cover up matters.
2. The Auditor General is very thorough. Please go read their reports on the internet. They crucify almost all Government Linked Companies (GLC) that they audit.
3. Time is of essence regardless of popular demand. We cannot simply address popular demand by compromising audit quality that needs time. We must hold on to "Innocent until proven guilty" to avoid fitnah (baseless accusations).
4. I have engaged many banks on due diligence and I have also been involved in many due diligences including power plant acquisitions. You need to understand variables before concluding error in valuation pricing, etc. Variables include technical useful life, power demand growth rate of 8% to 13%, discount rate of 10% to 12%. These are all not lay men terms. I know. So lay men need to trust people of technical knowledge to enlighten them and not some politician with no financial background. The Power Purchase Agreement (PPA) remaining license period is irrelevant when the owner is 1MDB, a GLC. Instead, technical useful life is relevant. The uncertainty of PPA extension is mitigated by the guarantee by Ananda Krishnan (AK) for the premium in price - or in lay men term, the so called "over pricing". Premium in price represents that extension. When Tenaga Nasional did not give the extension, AK has to cover. It is a business deal. Not political in my view.
5. There are too many overlace of propaganda with political agendas. We cannot believe all that people say on internet especially those with motive of winning political mileage. You know who they are.
6. Those with proper knowledge must explain in an understandable way for lay men. For this I am dissatisfied with the Board members of 1MDB for taking a back seat and pushing the Ministry of Finance (MoF) to answer. The Board and Management should know better than MoF because MoF has hundreds of GLC to monitor.
7. If 1MDB has established treasury policy and the policy allows investment in unit trusts then where is the problem? It is a business decision and all business decisions are exposed to risks. But yes.. reply given earlier was inacccurate.... back to my point on Management did not give complete information to MoF. Many people do make mistake assuming treasury unit trusts as cash equivalent.
8. Those charged with governance must be responsible, which means the Board and Management. It is either they act intra or ultra vires. Oh sorry... I keep on forgetting that I am supposed to address lay men. It should be read "...act within or outside authority". The latter should face consequences by the court of law.
9. Tun Mahathir is getting strong public support because he speaks in lay men terms whereas people answering for 1MDB uses financial jargon.
10. The ultimate thing here is to give a list that adds up to RM42 billion because all the liabilities inclusive of shares in the company must be equal to assets. They just have to justify the assets and how it is valued when acquired giving a total of RM42 billion... which brings us back to No. 4 above :) - Go look for an Accountant to help comprehend all this.... I suppose?
There are too many overlace of propaganda with political agendas. We cannot believe all that people say on internet especially those with motive of winning political mileage. You know who they are.
* kopihangtuah
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