Dr M fires more salvo at Najib, questions 1MDB finances

Tun Dr Mahathir Mohamad's latest blog posting touched on the issue of management of government finances which he said should be governed by laws, rules and regulations. Its expenditure has to conform to the proposals set out in its budget plans.

He added Governments can lose money through bad investments.

"We would know where the money is lost. But when huge sums of money disappear, then those entrusted with its management must answer for the disappearance.

"Disappearance is different from just losing. Disappearance is about money lost which cannot be traced. This can be because of corruption or theft," as written by Dr Mahathir in his blog.

He questioned how 1MDB, a company with RM1 million capital with no assets could borrow 42,000 times its capital with no collaterals.

"That 1MDB is able to do so is because of government guarantees. In other words it is Government which is borrowing the money. If 1MDB loses money, the government will bear the loss," he said.

Despite being a guarantor, Dr Mahathir also questioned why the operation of 1MDB is not overseen by government officers responsible for the management of government funds.

He said 1MDB started off wrong even from the beginning.

“It started off as an off-budget and it was not put before the Parliament. The money was borrowed. So it is not sovereign wealth but sovereign debt,” he said.

In the blog, Dr Mahathir also broke down the investments of 1MDB:

- Purchase of Tanjong Energy (now known as Powertek Energy Sdn Bhd) from Ananda Krishnan for RM 8.5 billion.

- Purchase of Genting Sanyen Power (now known as Kuala Langat Power Plant) for RM 2.3 billion.

- Purchase of Jimah Energy for RM 1.2 billion.

- Purchase of 70 acres of land in Jalan Tun Razak for RM320 million i.e: RM64.00 psf.

- Purchase of 495 acres of land in the former Sungai Besi TUDM airport (now known as Bandar Malaysia) about RM 363.5 million i.e: at RM 91.00 psf.

- Purchase of 234 acres land in Air Itam in Penang RM 1.38 billion i.e: at RM135.00 psf.

He said the investments and purchases known so far add up to RM14.7 billion and that there is about RM27 billion that needs to be explained.

“Where is the rest of the money?” he asked adding that 1MDB is not getting any returns from its investments.

He said the total loss incurred by the government is about RM25 billion.