IN October 2015, I wrote an article titled “1MDB: Proposals for our beloved Rulers”.

This was in response to the statement by the Malay rulers who wanted the government to complete the investigation into 1MDB as soon as possible. Their royal highnesses had stressed that the findings must be reported comprehensively and in a transparent manner, which shall not at all conceal facts and the truth.

Enforcement agencies and regulatory institutions, such as the police,  Malaysian Anti-Corruption Commission (MACC), Bank Negara Malaysia, Attorney-General’s Chambers and the judiciary, as well as related government bodies, were reminded to be worthy of God’s trust and the people’s faith with transparency, credibility and integrity.

A follow-up article on July 28, 2016, titled “My plea to the Yang di-Pertuan Agong on 1MDB” gave thirteen facts and reasons to support my proposals in the first letter.

At that time, the rationalisation plan for 1MDB was supposed to be completed.

The fundamentals of the plan were a “debt for asset swap” with International Petroleum Investment Company (IPIC), a sale of equity in Edra Energy, a sale of equity in Bandar Malaysia, sale of master-planned land in Tun Razak Exchange (TRX) and disposal of non-core assets. The combined proceeds will substantially reduce 1MDB’s debt to a sustainable and manageable level by Q4 2015.

The story then, amongst others, were:

1. 1MDB has successfully sold, in 2015, over RM1 billion of land in TRX;

2. Sale of power assets under Edra Global Energy Bhd for RM9.83 billion cash has been completed;.

3. 1MDB has consistently met, with no default, its interest and principal repayment obligations;

4. The government has guaranteed RM5.8 billion of debt (RM5 billion due in 2039) and provided a Letter of Support for a US$3 billion bond (due only in 2023); and

5. While there is a contingent liability on the government, 1MDB is confident that it will continue to meet its debt service obligations from a successful implementation of the rationalisation plan.

In October 2015, 1MDB’s group executive director said: “We are having discussions with our shareholder, the Ministry of Finance, and we are confident with our plan.”

On December 31, 2015, citing his promise in June that all the problems facing 1MDB will be resolved, the prime minister claimed that spring was in the air for the debt-ridden government strategic investment arm. “It is, therefore, clear that 1MDB’s major challenges are now behind it as I promised they would be last summer,” he said.

In his keynote address at Invest Malaysia 2016 (April 2016), the prime minister said the rationalisation of 1MDB was working and substantial debts have been cleared and, “Its assets are more than its liabilities, and those assets are real”.

He added that the Public Accounts Committee’s report identified weaknesses in 1MDB’s structure and management, and action would be taken if any evidence of wrongdoing was found.

He also said: “There has been and will be accountability. We are insistent on that in Malaysia.”

The rationalisation exercise was overseen by a high-level Budiman Committee. It completed all four of its assignments in December 2016.

In March 2017, the Finance Ministry told the Dewan Rakyat that 1MDB is now debt-free, as it has repaid in full all its bank loans amounting to almost RM4 billion. The settlement included a revolving credit facility to Affin Bank, full amount to the federal government for a standby credit facility, payment to Marstan Investments N.V. for a term loan facility and a term-financing facility to EXIM Bank. 1MDB had raised cash amounting to RM10.97 billion through sales of assets in Edra Global Energy Bhd, part of equities in Bandar Malaysia Sdn Bhd, and land for the Tun Razak Exchange project.

Sadly, there was this decision to abort a RM7.41 billion deal to jointly develop Bandar Malaysia with Iskandar Waterfront Holdings and China Railway Engineering Corp (the consortium). The reason given was the Consortium failed to pay RM7.42 billion for the 60% stake despite being given 12 extensions from December 2015.

Question here is, did the due diligence process omit the assessment of financial capabilities of the consortium. Surprisingly, despite the consortium’s non-conformance, the 10% deposit was returned.

And this week, the prime minister said the delay in payment by 1MDB to IPIC is merely a technical issue.

It should be noted that the dispute with the Consortium and the settlement arrangements with IPIC were handled directly by the Prime Minister’s Office (PMO) and the 1MDB Board.

I hope someone could enlighten me why these “sticky” and controversial issues are handled directly by the PMO. Added to it, was it an oversight that the payment was delayed to IPIC and was IPIC notified earlier? Even the notification did not state a specific date for payment. Were there some miscommunication? And has 1MDB received all of the RM10.97 billion cash it raised?

What I am very sure is we are experiencing an early autumn now because spring does not come after summer. I pray that this problem will not spill into winter as the consequences are dire.

However, I am happy to note that no one had been sacked or charged for all these misadventures.

Given the above, the rationalisation exercise was not really a success.

So, should the Malay Rulers issue another statement?

What say you…

* Saleh Mohammed 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.