Thursday, May 14, 2015

The Sarawak Report set-up that many fell for


One interview with Tun Dr Mahathir by Clara in January 2015 [read here, here and here], all the past sins of Sarawak Report towards Sarawak is forgiven.

Everyone including ex-journalists agree with the lies and condone their practise of fabricating pictures, emails and documents. The picture of SR putting a photoshop copy of doctored brown forest to show deforestation is still fresh in the mind from the last Sarawak state election.

Their method is obvious but there was reluctance by Sarawak based bloggers and those familiar with Sarawak to debunk SR. Maybe the Global Witness funded SR serve a purpose for a latter date. A major funder of Global Witness is George Soros. Was SR kept alive by certain invisible hands to launch an attack on 1MDB and Dato Najib?

There is a maxim, "The ends justify the means" but as Muslims or those professing other religions, both the means and the ends must be justifiable and right.

This article below came in from one of the Whass App group and it echoed what we have been saying [read here]:


Was 1MDB set up by the Sarawak Report?

From: Calvin Sankaran via e-mail

Not many Malaysians would have heard of 1 Malaysia Development Berhad (1MDB) six months ago even though it was incorporated in 2009.

The national strategic development company, as 1MDB would like to describe itself, made headlines in the financial pages late last year due to delays in submissions of financial statements to Bursa Malaysia as well as in repayments of its loans to banking institutions.

However only when the Sarawak Report (SR) website published its “The Heist of the Century”, did 1MDB hit the headlines and achieve national and international notoriety.

In that story SR made serious allegations of impropriety and fraud by 1MDB in its short-lived joint-venture with PetroSaudi International (PSI). SR followed up with the story with several more reports detailing further alleged instances of wrongdoings and questionable deals.

At first, Prime Minister Dato Seri Najib Razak denied the charges and defended 1MDB vigorously. However, very quickly the allegations proved to be highly damaging and toxic. Domestically it became the lightning rod for Najib’s critics within and outside the ruling party. Internationally the issue affected investors’ confidence to such an extent that it negatively impacted the economy and the value of our ringgit.

Belatedly realising the seriousness of the consequences, Najib ordered a through audit of 1MDB by the Auditor-General (A-G) Tan Sri Amrin Buang. However allegations continued to fly and speculation only got worse as Malaysians grew impatient with the slow pace of the A-G’s audit.

The aim of this article is to analyse the veracity of SR’s accusations based on the weight of the evidence. In particular I intend to examine three of the most serious allegations,
(1) USD700m was siphoned off by Jho Low,
(2) Jho Low was the main architect behind the Petro Saudi deal, and
(3) 1MDB lied about its money held in its Singapore bank account.
Before we carry out the analysis, let’s do an exploratory review of the evidence presented by Clare Rewcastle-Brown, SR’s founder/editor. Claire has claimed to have “thousands of documents” although she refused to disclose the source or the method the documents were obtained.

According to media reports, PSI had lodged a complaint with the London Police Action Fraud Unit at the National Fraud and Cyber Crime Reporting Centre claiming the “hacking” of its servers. An examination of documents presented in the SR website also indicates that the source is likely to be from PSI. In particular, its Chief Investment Officer (CFO) Patrick Mahony appears to be the target.

Emails published by SR do look authentic and there is no obvious evidence of forgery in terms of timeline, time stamps, content, language, etc. The documents uploaded onto the website also appear to be genuine. As such, we can proceed to examine each allegation in more depth.

Fortunately while the mechanics of the 1MDB-PSI joint-venture is complex, there is no need for us to make sense of these complicated financial transactions to seek out the answers to these three questions.

1. Did Jho Low siphon off USD700 million?

According to the terms of agreement between 1MDB and PSI, 1MDB was required to inject USD1 billion in cash into the joint-venture entity called 1MDB-PetroSaudi Limited. Because of the convoluted way the deal was structured, 1MDB was to pay USD700 million to PSI.

However according to SR [read here], instead of paying PSI, the management of PSI and 1MDB conspired to divert the USD700 million into the account of a Jho Low-owned company called Good Star Limited.

EVIDENCE:
To back its allegation, SR produced a Letter of Demand signed by PSI’s Chief Executive Officer (CEO) Tarek Obaid to 1MDB-PetroSaudi Ltd requesting for USD700 million to be credited to account number 11116073, at RBS Coutts Bank Ltd in Zurich, Switzerland.




However SR claimed that the account number (11116073) belonged not to PSI but to Good Star Ltd. To support this assertion, SR produced three more pieces of evidence. First SR produced an email from Patrick Mahony to Tarek Obaid in which the CIO said that the account number 11116073 at RBS Coutts Bank Ltd belonged to Good Star.




SR further furnished a typed extract showing Good Star Ltd having a registered office at the address: PO Box 1239, Offshore Investment Centre, Mahe, Seychelles with a Seet Li Lin as the Chief Investment Officer. SR claims that Li Lin is Jho Low’s right-hand man.


Finally SR also produced an email in which 1MDB’s ex-CEO Sharol Halmi instructed a Deutsche Bank Malaysia officer to transfer the funds to Good Star Ltd and provided the same bank, account number and address.


By linking all these pieces of evidence together, SR alleged that Jho Low used Good Star Ltd as a vehicle to siphon off the USD700 million from the 1MDB-PSI deal.

ANALYSIS:
The evidence #1 looks certainly authentic as it was produced in PSI’s official letter head, carried Tarek Obaid signature. Also details such as the language, dates, address, signature etc all appear to be correct and proper.

However, the same letter also clearly states the money is to be paid to PSI (the beneficiary) while providing the same bank name and account number. So the question now is whom does the account actually belong to, PSI or Good Star? It cannot be that two different companies share the same bank and bank account number.

So let’s look at SR’s evidence linking the account to Good Star. The evidence # 2 is an email from Patrick Mahony to Tarek Obaid which links the account number to Good Star. However this email doesn’t look authentic as the format doesn’t look like email format at all but rather a typed text / memo. Also the contents – salutation, date, etc. – all do not look authentic and raises several red flags.

Evidence # 3 is also a typed extract from a memo which links Good Star Ltd to the address stated in the account number. It was not taken from any official document and as such it is hard to attach any credibility to it.

Evidence # 4 that shows Sharol Halmi instructing Deutsche Bank also raises red flags as the email looks suspicious and suggests several signs of tampering. The sender’s email address is missing and the time stamp indicates “GMT-4” which is the US Eastern Standard Time Zone which also includes the Eastern Caribbean (a region where offshore financial centres abound). The format of the email also indicates the type that is used by BlackBerry devices and looks very different from other emails SR attributes to Sharol. Since Sharol is based at KL, it is unlikely that he’s conducting business from the US East Coast or some Caribbean Island.

To get to the bottom of this mystery to find out which company is actually incorporated in the location provided, I did some research and established that in fact the address PO Box 1239, Offshore investment Centre, Mahe, Seychelles is the official address of PSI.

This is actually quite easy to prove since it is printed in PSI’s official letter head as a footer. In fact we could have called SR’s bluff had they reproduced evidence # 1 in full rather than showing only the top part of the letter and hiding the footer which had the address. The reader can independently verify this fact since PSI had issued several official statements to the local press using its official letterhead during its acquisition of UBG Bhd shares back in 2010 and which still can be found on the web.

CONCLUSION:
Based on the analysis above, I can conclude that:

(i) There is no evidence that USD700 million was transferred to parties other than as stipulated by the JV agreement

(ii) It appears that there was a deliberate and systematic attempt to tamper with and fabricate emails and documents with an objective to paint 1MDB, PSI, their management team and Jho Low in a negative light for reasons unknown.

2. Was Jho Low the main architect behind the 1MDB-PetroSaudi Deal?

SR charged that Jho Low was the main architect behind the 1MDB-PetroSaudi deal. His right-hand man Seet Li Lin was shown as making all the arrangements with PSI without the involvement and knowledge of 1MDB. Only when the deal was finalised, claimed SR, did Seet bring 1MDB on board to conclude and sign the agreement.

EVIDENCE:
SR provided a series of email conversations between Seet, Jho Low, Sharol and Patrick Mahony as evidence to support their claim.

ANALYSIS:
All emails purportedly from Jho Low and Seet Li Lin were using gmail accounts. It is highly inconceivable that a billionaire negotiating billion-dollar deals would be using an insecure and free email service such as gmail. As these emails were sent using Blackberry phones, it is hard to believe that someone would use a secure communication device such as BB yet communicate using insecure gmail accounts.

Also the timestamp of “GMT+2” or “GMT+0” is another red flag since it indicates the time zones of senders in Europe (London and Central European Summer Time Zone respectively).

Further these emails were sent using the telecom service provider T-Mobile, who at the time (2009) only had a presence in the UK, Germany, the US and several other European countries. It had no presence in Asia. Since Jho Low and Seet were based in HK, it is unlikely that they would have been subscribers of T-Mobile or operating from Europe.

Additionally there were many other obvious mistakes in the emails such as Patrick sending himself emails or someone not in the original email loop appearing out of nowhere in the middle of email conversations.

CONCLUSION:
Based on the above analysis, I can conclude that PSI’s emails were deliberately amended in the header and in some cases, parts of content. It is most likely that the person who amended the emails took genuine emails and made minor changes to “address line” and content to make it support a certain agenda.

3. Did 1MDB lie about its bank balance in Singapore?


SR reported that 1MDB presented false bank statements on the amount held at BSI Bank Ltd Singapore. This was apparently communicated by BSI to Singaporean authorities.

EVIDENCE: None. SR did not provide any evidence.

ANALYSIS: Anyone even with basic understanding of corporate banking practices knows that this accusation simply cannot be true. BSI is a private bank and one of the key selling points of these banks are client confidentiality, discretion and banking secrecy.

There is absolutely no way a private bank or even any international bank would be willing to volunteer transactional and account details of their clients to authorities without a specific court order. In this case it is even more complicated as BSI Singapore is beyond the legal reach of Malaysian law. Furthermore the A-G’s Department is an auditing and not law-enforcement agency.

CONCLUSION: This accusation is not supported by any evidence. Furthermore this allegation does not make the slightest business or logical sense. As such it has to be dismissed as yet another false allegation.

I am certain that when the A-G tables his report in June, he will confirm my findings above as he would have had full access to 1MDB’s actual contracts, emails, bank accounts, etc.

What surprised me most is that even seasoned financial journalists who should be knowledgeable of banking and corporate practices, failed to spot the numerous and major irregularities in SR’s reports. Most of them gleefully reported what SR published on its website without critically examining it or the evidence presented.

As for Clare Rewcastle-Brown, whether she’s party to this elaborate fabrication scheme or not, is certain to face criminal charges after the conclusion of London police’s investigation into PetroSaudi’s report as the hacking and fabrication took place in the UK.

If she truly believes in the authenticity of her evidence, then I challenge her to present them to the UK authorities or an independent forensic agency for authentication or investigation.

But then I am sure she won’t because she knows the evidence was fabricated.

---------------

By the way, it has come to our knowledge that Jho Loh has initiated lawsuit against Euromoney and Sarawak Report. There was no words of his mentioning of UMNO. It seemed suing slanders in the UK is not as easy as they are protected under the pretext of public interest.


Just notice SR having the above cautionary statement. Is that a license to slander - hantam first, court later but reader already made conclusion?

16 comments:

Anonymous said...

Actually, The Edge has been keeping tabs on the improprieties of 1MDB as early as 2010 when they starting all those dodgy deals in the Middle East and Central Asia.

Sarawak Report harbors more on the sensationalistic front ala Malaysiakini.

Anonymous said...

http://www.malaysia-today.net/sarawak-report-lied-1mdb-is-a-okay/

Oh yeah?

Anonymous said...

There is a clear difference between the truth and falsity

It is quite far apart between reality and fantasy.

Having said the above, I can safely conclude that however smart and or loyal you are, the problem of 1MDBis real and genuine.

I have said it many times and I will repeat down here explaining away the truth.

EXPLAINING AWAY THE TRUTH

It is no good at all
to conjure all sorts of reasons
to explain away truth:

One could subscribe to truth
only when one has self-respect in the first place;

When a man tells untruths,
he has no respect for himself
and little would he do better for others
except for his own gain;

And when a man tells lies,
he has a tendency to forget:

With one lie after the other,
eventually he would be caught
in his own tangled web:

Anonymous said...

Someone should translate this article and send it to Dato' Siti Nurhaliza, before she tweets something stupid again, causing so many melayu to melatah histerically just like about Tabung Haji. Dia SPM Gred 2 je kan? (Hahahaha, I've learned to use that currently popular "question strategy").

A Voice said...

Anon 3.52

PM said he is willing to hear views on the business model of 1MDB. It is admittance of problem. 1MDB could not sustain on high debt and a failed listing plan.

But cannot assume RM43 or later RM27 billion dissappeared or stolen. That is lying.

Sir Wenger Khairy said...

Er Mr AOB,
This article appears under Calvin Sankaran in Free Malaysia Today.
Now under your portal as well.

Is the real dalang Tuan Guru Lim Sian See?

Django said...

I dont get this nitpicking "skejap 43 skjejap 27". The point is the 43 is a whole figure that is never going to be gotten back. The 27 is a breakdown of the 43 while the rest is a mystery. Is that so hard to comprehend? Some medias and individuals keep harping about this. Is It really thought that everything is A-OK on this dumb reasoning of "skejap 43 skejap 27"?

Anonymous said...

Don't have to analyse like what you did. Just tell Najib to tell the rakyat where the balance RM27 billion borrowed by 1MDB went to. Ask him why he has to resort selling assets and borrowings to meet 1MDB financial obligation.

calvinsankaran said...

Thanks for publishing my letter!

I do agree that there are some problems in 1MDB from what I observe from outside. It has been run like a hedge fund or investment company rather than a GLC.

Their business model too is flawed and the oversight is insufficient and lacking.

However to accuse the company being involved in outright fraud and impropriety is completely untrue.

But their biggest problem is the lack / slow response to all the politically motivated accusations.

Once AG's report is out, 1MDB ought to sue Clare and Tony Pua to bankruptcy. What they did was tantamount to treason and economic sabotage. Also PDRM must investigate the person/persons behind this scene. I don't think Clare is alone.

BTW, no expose on SR is on the way.

Anonymous said...

Ohhhh I see. A set up. So we've all fallen for a pack of lies by SR. Dammit.

So. No problem for PM to tell us where the money is, then. Eh?

Anonymous said...

"PM said he is willing to hear views on the business model of 1MDB. It is admittance of problem. 1MDB could not sustain on high debt and a failed listing plan."

Riiiiight. Hahahahaha. Okay, man. Whatever. You're seriously losing all credibility. Is it worth it, in the long run?

Anonymous said...

Anon 4:09,
The rakyat is willing to hear the prime minister as well as the finance minister as well as the 1MDB chief explain the business model of 1MDB. No one is presuming RM27 Billion is lost or stolen: The whole world wants to know which nook and cranny the damned banknotes have been stuffed in .... honestly speaking.

Anonymous said...

We hope you are trying to be objective NOT pathetically defending najib and rosmah.

Her lavish lifestyle is utilising WHOSE money?? She is just a housewife and najib has no family inheritance - validated by his own BROTHERS.

Her son's purchase of a high end penthouse and his amateurish attempt at movie making COSTS huge sums of money. Again where did this money come from??

The wedding of the century and the trip to her son-in-law's home costs money. Where from??

Most importantly, investments should be from excess SAVINGS not borrowings at HIGH interest rates.

Jho Low is closely linked to rosmah and her son.

These are FACTS not movie scripts.

Anonymous said...

This posting is about a single issue ... Credibility of sarawak report

But commentors want an answer to all their grouses.

Be realistic in your comments la .. People

Anonymous said...

10:42 AM

Credibility of sarawk report is ABOUT credibility of the man in charge of 1MDB, of Finance ministry, of Malaysia

which concerns everyone

these issues are linked

and who are you to dictate what to comment??

Anonymous said...

Well calvin sankaran agree that 1mdb and najib should bring this matter to the court.

Well the rakyat would like to know more detail whats transpired and najib personaly should bring this matter to the court!

My Say