Sir Wenger Khairy On 1MDB

This is taken from the Malaysian Insider here.  This article is written by Sir Wenger Khairy.

Wenger Khairy now writes interesting stuff on Malaysian Insider (which are not 'kissy kissy' stuff about KJ). I have reproduced his thoughts in my Blog before.  So here is another one from Wenger:

Malays the big losers in 1MDB restructuring – Sir Wenger Khairy

Published: 8 June 2015 1:40 PM

As indicated by The Edge, 1MDB’s debts as of FYE 2015 should be around RM49 billion. This represents an increase of RM7.2 billion from FYE 2014’s interest bearing liabilities of RM41.8 billion, caused by the weakening of the ringgit which increases existing US dollar liabilities, a syndicated loan of US$1 billion taken against the Deutsche Bank consortium (subsequently converted to a US$1 billion term repo with IPIC) and the RM960 million bailout provided by the Finance Ministry.

The government plan to rescue this massive ('debt'?) is 3-fold:

· “Injection” of USD$4.5 billion cash (about RM17 billion) through IPIC. The “injection” comprises a loan of US$1 billion secured by the Cayman Islands “units” in BSI Bank (called a “term repo”), repurchase of 1MDB GIL stake for US$1.6 billion, at cost, purchase of the Penang land at a slight profit for US$500 million, and return of US$1.4 billion, currently held as deposit in return for a guarantee by IPIC over a US$3.5 billion bond issue, in return for unspecified consideration.

· Sale of Edra for RM15 billion, representing a loss of RM3 billion over the purchase price of the assets.

· Sale of Tun Razak Exchange land and Bandar Malaysia land for RM18.5 billion. We can obtain this amount of RM8.5 billion by considering the sale of 70 acres of TRX land for RM2,200 psf and Bandar Malaysia for RM530 psf.

Perhaps the figure of RM18.5 billion is on the high side of estimates – a more realistic estimate is perhaps about RM16 billion, corresponding to RM1,880 psf for TRX land and RM470 psf for Bandar Malaysia land.

This will give total cash consideration of about RM50 billion and solve 1MDB’s cash flow problem for the medium term. 1MDB emerges from a horrible hole with breathing space for some time. They will then need to find out ways how they can earn a return of 8% in ringgit Terms to cover their operating costs and their interest costs, after taking accounting for the roll yield to overcome USD liabilities. But short term, they will have no problem.

On a whole, non-Malays are not affected by this deal. There is no real transfer of wealth from non-Malays to Jho Low or other entities. The bailout of RM1 billion courtesy of tax payers will be returned. Even better, non-Malays feature prominently in 1MDB.

Malays, however, will see the loss of TRX and Bandar Malaysia land – land originally slated for Bumiputera development. This land was originally meant to enable the Malays to own valuable piece of commercial and housing real estate in strategic parts of KL. But now it is gone!

This land will be developed by international and other non-Malay developers, and the prices will be sold to people without any need for Bumiputera discounts. With such a high cost base, developers will be forced to sell completed units at extremely high prices, out of the affordability of even upper middle class Malays.

Many chauvinists are very happy and feel that this is appropriate since those who are cheering 1MDB are strong defenders of race and religion such as Datuk Seri Ahmad Zahid Hamidi, Datuk Ahmad Rahman Dahlan and Tan Sri Shahrir Samad. 

They have been cheered on by ultra-Malay bloggers, who made a living accusing the non-Malays of doing all sorts of harm to the Malays. The term the chauvinists like to band about is a conjunction of "erase" and "face".

As for us, we see no issue. The Malays voted for Umno to defend them against the non-Malays, led by DAP. The president of Umno gifted Malay land to an entity which then went and entered into many questionable transactions and took on a lot of debt. In order to save the situation, the original Malay land needed to be sold.

No issue as those involved are well supported by vocal defenders of race and religion. But economically, the Malays have lost out big time in obtaining a chance to establish businesses in the heart of KL.

After all, you can “rembat” a couple of billion and spend one to two million to buy up some bloggers to support you, including supposedly very neutral and “ultra-Malay” bloggers, such as The Unspinners and Gerakan **** P*R. 

These people will bark and foam at the mouth to protect you and try to hoodwink others.They would even insult their own statesman, who has seen through this scam and is trying to alert the people.

• The police are busy tweeting and unable to investigate. 
• The Central Bank – all hot air and little follow through. 

All these so-called institutions just bow down and are unable to stand against you. You walk away with a couple of billion, light a cigar and exclaim, “What a wonderful world.” – June 8, 2015.

* Sir Wenger Khairy reads The Malaysian Insider.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.

My comments :   Well the TRX and Sg Besi land belongs to all Malaysians, especially taxpayers.  Not just the Malays bro. 

Whatever good and bad accrues to everyone.

I agree that not many Malays will be able to buy such expensive properties, no matter who is the developer.

My view is if the ownership of the land remains within our country, the profits if any, from the sale of those developments on those lands will accrue inside Malaysia.

Now the camels will take the profits out of the country.  

But here is a much bigger question. Who in their right ind will want to buy the TRX developments and the Sg Besi developments? 

Talk is that Mulia Group is NOT buying that RM578 million parcel (for that signature tower).  You must have read the news about that Mulia Group guy (the Indonesian) who is a fugitive from Indonesian law. 

And Tabung Haji has NOT yet found a buyer for that RM194 million parcel they have bought.

A friend opines that both those developments are "toxic" meaning there has been so much bad press about this whole thing.  It is almost like bad 'karma', whatever that really means.

Chinese people would call it 'soi' - Cantonese for bad luck.   Another friend, a huge property developer, said that the Sg Besi land is near that huge graveyard. A graveyard is full of dead people. 'Sei' is Cantonese for 'Die'.

So who is going to buy apartments, offices etc or locate themselves to these developments?

Would you want to buy a unit (an apartment unit - no pun intended) in either the TRX or the Sg Besi development? 

Do Arabs read my blog?