Thursday, July 27, 2017

Is Treasurer-General and 1MDB Chairman, Tan Sri Irwan Serigar aware of a third ‘secret’ Letter of Support for 1MDB’s US$975 million borrowing from a Deutsche Bank-led consortium in September 2014?

The latest suit filed by the United States Department of Justice (US DOJ) last month exposed a new allegation Dato’ Seri Najib Razak signed a ‘secret’ Letter of Support for 1MDB to secure a US$975 million loan from a Deutsche Bank-led consortium in September 2014.

The US DOJ suit stated that Dato’ Seri Najib Razak, referred to as “Malaysian Official 1 (MO1)”, “on behalf of the Government of Malaysia, provided a Letter of Support to Deutsche Bank in connection with the $975 million loan.”

This would have been a third Letter of Support issued by Dato’ Seri Najib Razak as the Finance Minister to effectively guarantee borrowings by 1MDB.  The letters had stated that “in the event 1MDB… fails to provide the required funds, Malaysia shall then step in to inject the necessary capital into the Issuer or make payments to ensure the Issuer’s obligations are fully met”.

The DOJ suit further noted that “internal Deutsche Bank records reflect that 1MDB officials opted to provide a Letter of Support signed by MALAYSIAN OFFICIAL 1, rather than some form of guarantee by 1MDB… at least in part because a letter of support did not require Bank Negara or Cabinet approval. At the request of 1MDB, all references to the Letter of Support were removed from the Facility Agreement.” 


I had submitted a question to the Finance Minister to confirm the existence of the letter in the current parliamentary sitting.  However, the question has been inexplicably rejected by the Speaker on the ultra-flimsy grounds of presumably questionable assumptions (“sangkaan”).

I had last week issued a statement via a press conference seeking answers from Dato’ Seri Najib Razak himself as to whether he had indeed issued this “secret” Letter of Support and whether he had the authorisation from the Cabinet and Ministry of Finance to do so.

However, the questions posed have been met with utter silence, whether from the Prime Minister himself or from his Cabinet cheerleaders.

I can fully understand why the Prime Minister might want to remain absolutely silent so as not to incriminate himself with any answers he may provide.

Hence, I now pose the same questions to the Treasurer-General of the Ministry of Finance, Tan Sri Irwan Serigar who has also been appointed as the Chairman of 1MDB just a year ago.

As the Treasurer-General of Finance Ministry, is Tan Sri Irwan Serigar aware that the Minister of Finance had signed a third Letter of Support for 1MDB in September 2014?  The official reply provided by the Minister of Finance in March 2016 stated that there were only 2 such Letters of Support issued in March 2013 for US$3 billion and another in March 2015 for US$150 million.

Was the reply which would have been prepared and approved by the Treasurer-General mistaken? Or was he, horrors of horrors, completely unaware that a third ‘secret’ Letter of Support had actually been issued by the Finance Minister, Dato’ Seri Najib Razak.

Secondly, even if he was not previously aware of the ‘secret’ letter, Tan Sri Irwan Serigar, as the Treasurer-General and 1MDB Chairman, must surely investigate.  Has he called Duetsche Bank to verify the existence of the Letter of Support as alleged by the US DOJ?

If Tan Sri Irwan fails to do the simple task of calling up the Bank to confirm this information, then he has betrayed the trust of Malaysian tax-payers as the most senior financial civil servant in the country today.

If he is unable to protect the financial interest of the 30 million Malaysians in the country, then he is completely unfit to continue in his position, both as the Treasurer-General and the 1MDB Chairman.
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