NOW that the focus has turned from hiding the losses of 1Malaysia Development Bhd (and other) financial scandals to recovery of assets, the attitude of the government administrators must also reflect the new objective.

Usually, for such an exercise, a crack team of lawyers, accountants, and other pencil pushers are assembled. They tuck their napkins into their collars, settle back into their cushy armchairs, and lick their lips as they settle in for the lengthy feast. This is the opposite of the correct course of action.

Instead of outsourcing the work to bean counters paid by the hour, who will gladly stretch the task to years, the administrators of the recovery programme should act like owners, meaning that they should focus on the twin goals of maximising value and minimising time.

Maximising value

The people who misappropriated money from 1MDB used it to invest in a variety of assets. Some, such as luxury real estate and famous works of art, may appreciate over time. But others, such as fashionable handbags and super yachts, start depreciating the minute they leave the showroom.

The bean counters like to take their time to research and catalogue these items, with intricate due diligence, over months and months, only to then announce liquidation in fire-sale auctions that constrict  buyers into time-bound deadlines. There is nothing that ensures distressed pricing more than a forced sale of a US$50 million mansion or a US$100 million painting.

The super yacht Equanimity, which cost a cool US$250 million when she sailed out of the Netherlands in 2014, will gather layer upon layer of mould in a wet berth in Fort Lauderdale until she recovers pennies on the dollar when unceremoniously dumped onto a sensitive market.

The bean counters couldn’t care less. Their job is to administrate a process and collect fees, not to maximise the value of the assets returned to the people of Malaysia. An owner, however, would ensure that he fetched the best price that he could, by preserving his assets in their best possible condition and by diligently searching out the highest bidders.

Minimising time

On July 20, 2016, the United States Department of Justice and FBI held a now-infamous press conference with then attorney-general Loretta Lynch and then FBI deputy director Andrew McCabe (both since fired by President Donald Trump) in which they exposed 1MDB as the largest case of government kleptocracy ever prosecuted by their institutions.

However, two years on, they are still plodding away at their civil case and, at this rate, it will comfortably go on like this for another year or two at least. When they do seize assets they have to retain custody until winning judgements allowing them to liquidate them for cash, another long and drawn-out process. In the meantime, Malaysians are paying interest through their noses on 1MDB’s mountains of debt – the cost of which compounds with every year that recovery is delayed.

If and when the US government does recover some of our money, we still have to undergo a formal process of reclaiming the proceeds for repatriation, for which the sum calculated will first allow them to recover their (not unsubstantial) costs. By this point you get the idea that not only will this whole saga take its own sweet time but also bears a high cost of capital over the years.

An owner would not sit back and watch this drama unravel as a passive spectator. He would get into action and cut a deal to get his money back as soon as possible. After all, now the government is on the same side as them and the rightful owners, the people, and not facing them as defendants.

* Dr Rais Hussin is a Bersatu supreme council member and heads its Policy and Strategy Bureau. He reads The Malaysian Insight.  

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.