I HAVE read 2 recent news stories originating from the Singapore Straits Times (ST) with an equal degree of bemusement and surprise. Bemused because the stories were somewhat puzzling and amusing. Surprised because of the shocking levels of quality control for the paper which prides itself with straightjacket reporting. The paper just can’t seem to get its very basic facts right.

On 7 October, ST reported that:

A milestone interest payment for a huge debt owed to Abu Dhabi that falls due in mid-October is presenting Prime Minister Mahathir Mohamad’s new government with its most serious economic challenge yet as it struggles with the aftershocks from the 1Malaysia Development Bhd (1MDB) scandal.

The interest charge of US$50.3 million represents the first financial commitment that the Pakatan Harapan (PH) coalition government must honour over the 1MDB affair since coming to power after the general election in May.

[…]

A full settlement of the milestone payment before the deadline on Oct 15 would amount to an explicit recognition on the part of Tun Dr Mahathir’s new administration that it recognises the liabilities and commitments it inherited from the previous government on all 1MDB-related matters. That in turn, would set a dangerous precedent, which other creditors of the scandal-plagued sovereign fund are likely to seize upon when demanding the settlement of debts.

Firstly, the interest payment in October is certainly NOT the first this administration has faced with the 1MDB bonds. On 31 May 2018, Finance Minister Lim Guan Eng already announced that he had “very reluctantly” signed of the interest payment of RM143.75 million the previous day for a 1MDB bond ‘guaranteed’ by International Petroleum Investment Corporation (IPIC).

And what “dangerous precedent” is ST referring to?

Yes, we don’t have a choice but to fulfil our commitments for the bonds where the MoF had previously provided ‘back-to-back’ guarantees to IPIC. The failure to do so would immediately trigger potential defaults and downgrades for all the Government’s other borrowings. However, making current payments does not in any way mean that we concede to our fight against those who have defrauded 1MDB and the Malaysian government. Both the Finance and Prime Ministers have previously highlighted that we will pursue all legal claims against those who are complicit in the heist against Malaysians, including but not limited to the investment bankers and individual culprits.

So who are these mysterious “two senior Malaysian government officials, who report directly to Dr Mahathir on 1MDB related matters”, who purported squeaked to ST that “Kuala Lumpur is inclined to renege on the interest payment”?

ST got it so wrong because MoF had already authorized and made the October coupon payments without fuss. Surely, ST can get better sources for its stories.

We didn’t make an official response to ST as we didn’t have a bone to pick against the Singapore paper. However, ST followed up on 14 October with a story headlined “Malaysia’s 1MDB Debt to Abu Dhabi may have Ballooned”.

The story by the same writer claimed that

The conundrum facing the Malaysian government is that the commitments listed in the IPIC statement to the London Stock Exchange, amounting to roughly US$6.89 billion before interest charges, are more than double the sum Kuala Lumpur believes is owed to Abu Dhabi.

I’ve checked and double-checked the IPIC statement to the London bourse.

The Abu Dhabi company stated that the guarantee for IPIC debts amounting to approximately US$6.89 billion will be assumed by its parent company Mudabala Development Company PJSC. The announcement at the same time discloses that the “Guaranteed Obligations” provided by IPIC for the two 1MDB bonds amounting to US$3.5 billion, will also be assumed by Mudabala. It doesn’t say that 1MDB owed US$6.89 billion in debts to IPIC or Mudabala.

Hence, I’m stunned by the ST reporting standards when both the writer and its editors failed to read and understand the legal-financial statement by IPIC. At the very least, they should have obtained legal or financial advice from those who did. Or alternatively, they could have contacted the Malaysian Ministry of Finance for clarifications.

What I’m particularly curious about however, is the fact that the above aren’t the first time the ST has misreported. ST wrote that “Malaysians are shrugging off the 1MDB scandal” on 28 April. It was ST who broke the story on 9 May 2017 that “Datuk Seri Najib Razak has all but tied up the deal with Dalian Wanda” on the sale of Bandar Malaysia – which turned turkey because the then Malaysian Prime Minister didn’t even walk away with a perfunctory Memorandum of Understanding (MoU) with Wanda.

ST even reported in April 2017 that 1MDB would sign a settlement with IPIC with the former will make payments the latter with “most of the money would come from the sale of ‘fund units’ from 1MDB subsidiary Brazen Sky to an undisclosed buyer”. We know of course that this is poppycock because the Brazen Sky ‘fund units’ was nothing but a fraudulent investment vehicle.

So, what’s up with The Singapore Straits Times on its persistent misreporting on 1MDB?


TONY PUA
Member of Parliament for Damansara
Political Secretary to Minister of Finance