Saturday 1 March 2014

1MDB. Time to be transparent.

Two weeks ago, The Edge wrote about the power assets 1MDB acquired for RM10.85b. Based on the estimated original IRR (internal rate of return) of these power plants, The Edge estimated that 1MDB may have overpaid in excess of RM2b. Consequently, the IRR of the power assets acquired by 1MDB are in single digit, close to 4%. These are also old power plants.

As a result, The Edge had predicted two weeks ago that 1MDB will be given Project 3B, the RM11b, 2000 MW, coal-fired power plant to be built in Negeri Sembilan. 

This is necessary to raise the overall IRR of 1MDB power assets to facilitate an IPO. A cash raising exercise for 1MDB is paramount as this sovereign wealth fund (yes, it belongs to all Malaysians) has already accumulated over RM30b in debts over a short 5 years of existence. 

Yesterday, the Energy Commission announced that 1MDB has been awarded Project 3B. Surprise, surprise!

In this week's Edge, Kay Tat responded to the comments made by 1MDB in relation to The Edge's article two weeks ago. He also raised more questions. Three external auditors in five years?
"Where is the beef" (US$2.32 billion of cash purportedly managed offshore)?

Read more in The Edge.
This is a sovereign wealth fund. It is time to be transparent, please.

1 comment:

  1. I saw the front page of The Edge showing Sarawak CM's Net Worth around the world. Cool move Tong; Time To Be Transparent? haaa... no way, the Greed of politicians who spend the rakyat blood money will never stop as long as the roots are not removed.