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Political secretary of Malaysia’s Finance Minister launches criticism against ST’s “persistent misreporting”

In a press statement on Malaysian news channel Astro AWANI, Political Secretary to Malaysia's Finance Minister and Damansara Member of Parliament Mr Tony Pua has declared his dissatisfaction against The Straits Times (ST) for its "persistent misreporting" on the 1Malaysia Development Berhad (1MDB) scandal.

Quoting two news stories by ST, Mr Pua expressed his "bemusement" and "surprise" at "the shocking levels of quality control for the paper which prides itself with straightjacket reporting," adding that "the paper just can’t seem to get its very basic facts right."

He wrote that "On 7 October, ST reported" the following:

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.

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

He also questioned the use of the phrase “dangerous precedent” in ST's reporting, adding that "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, as "failure to do so would immediately trigger potential defaults and downgrades for all the Government’s other borrowings."

Mr Pua added that making current payments does not indicate that the Malaysian government has stopped fighting against "those who have defrauded 1MDB and the Malaysian government, as "both the Finance and Prime Ministers [Mr Lim Guan Eng and Dr Mahathir Mohamad] 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."

Given the facts, he subsequently questioned: "So who are these mysterious “two senior Malaysian government officials, who report directly to Dr Mahathir on 1MDB related matters”, [and] who [had] purported[ly] squeaked to ST that “Kuala Lumpur is inclined to renege on the interest payment”?"

Rebutting ST's reporting and allegation, Mr Pua insisted that Malaysia's Ministry of Finance "had already authorized and made the October coupon payments without fuss," adding: "Surely, ST can get better sources for its stories."

He explained that Malaysia's Ministry of Finance did not come up with an official response to ST at the time "as we didn’t have a bone to pick against the Singapore paper."

"However," Mr Pua added, "ST followed up on 14 October with a story headlined “Malaysia’s 1MDB Debt to Abu Dhabi may have ballooned,” which 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."

In refuting the allegation, Mr Pua clarified that he has "checked and double-checked the IPIC statement to the London bourse," and found that "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."

He emphasised that "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, and pointed out that "it doesn't say that 1MDB owed US$6.89 billion in debts to IPIC or Mudabala."

Following the errors he had cited, Mr Pua said: "I am stunned by the ST reporting standards," particularly regarding the writer's and ST editors' failure "to read and understand the legal-financial statement by IPI."At the very least, they should have obtained legal or financial advice from those who did. [...] alternatively, they could have contacted the Malaysian Ministry of Finance for clarifications," he suggested.

Mr Pua also noted that this was not the first time that ST had misreported events connected to 1MDB.

He said, quoting a headline from 28 Apr stating that “Malaysians are shrugging off the 1MDB scandal”: "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 making payments to the latter," largely 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," he said.

He concluded his media statement, saying: "So, what’s up with The Singapore Straits Times on its persistent misreporting on 1MDB?"