Don’t bite off more than you can chew, Pua tells Ahmad Maslan

Putrajaya should not attempt to “bite off more than it can chew” by making promises on the profitability of controversial sovereign fund 1Malaysia Development Berhad (1MDB), said Tony Pua.

The DAP national publicity chief said Deputy Finance Minister Datuk Ahmad Maslan had last week boasted that he was confident 1MDB would return to profitability next year.

"Ahmad should have learnt his lesson from his recent experience in Parliament where he had to 'edit' his parliamentary reply," Pua said in a statement today.

On November 18, Ahmad Maslan was forced to apologise to the Dewan Rakyat for having left out “six words” during his speech in Parliament over a controversial letter of support for 1MDB.

Responding to a motion to refer him to the Parliament’s rights and privileges committee, Ahmad said he had not intended to mislead the House when he said on November 6 that there was no other sovereign guarantee or letter of support to the Putrajaya-backed investment arm.

“I accept my mistake of having left out six words that there is no other guarantee letter,” said Ahmad, who is also the Barisan Nasional MP for Pontian.

However, on November 20, Ahmad told a press conference that he 'was confident that 1MDB would return to profitability in the financial year of 2015.

Pua said Ahmad should not be making promises concerning 1MDB's profitability for the financial year ending March 2015 when he had no power to make such assurances.

"Since 2011, 1MDB has achieved profitability entirely as a result of revaluation of properties which were sold to 1MDB by Putrajaya at heavily discounted prices," Pua said.

"In 2011, 1MDB made a profit of RM544 million on the back of a property revaluation of RM827 million.

"In 2012, 1MDB made a profit of RM45 million on the back of RM570 million in property revaluation.

"Last year, 1MDB made a profit of RM778 million on the back of RM2.7 billion in property revaluation.

"However, for the most recent financial year, 1MDB made a loss of RM665 million despite a revaluation of RM897 million," said Pua, who is also the Petaling Jaya Utara MP.

Therefore, he said, from 2011 to 2014, while 1MDB reported cumulative nett profit of RM690 million, it would have recorded a cumulative loss of RM4.33 billion without the paper gains arising from the revaluation of properties which were sold to 1MDB at basement prices.

"Barring another round of exorbitant revaluation of its property assets, the company will continue to bleed heavily in 2015 because the operational profit from its power plants is far from being able to overcome the interest arising from its RM42 billion monster debt," Pua said.

He said this year, 1MDB’s financing cost rose to RM2.4 billion.

However, its operating income amounted to a paltry RM37 million while other operating income comprising of investment dividends and interests amounted to RM751 million.

Hence without taking into account the property revaluation, 1MDB would have lost RM1.61 billion instead of the reported RM665 million.

"For next year, 1MDB’s operating income is not going to increase because the new contracts for power plants are not even built yet.

"At the same time, work has not even started for Tun Razak Exchange and Bandar Malaysia for any revenues to be recognised.

"Since financing cost is expected to be even higher due to costly loan restructuring which was undertaken, 1MDB would therefore be thanking their lucky stars if the losses were not higher for the year ending March 2015."

Pua said Ahmad should not try to be too clever by giving promises that 1MDB will return to profitability for the next financial year end and end up with more egg on his face.

"He should also not cover up 1MDB’s appalling performance and returns by claiming that 1MDB has spent RM382 million on Corporate Social Responsibility (CSR) projects.

"The money spent on CSR did not come from the cash profits generated by the company, but instead are raised from the massive debt incurred by 1MDB which are substantively guaranteed by Putrajaya."

Last Friday, Prime Minister Datuk Seri Najib Razak issued a letter of demand to Pua over the DAP lawmaker’s “defamatory” remarks against him on November 3 about 1MDB, which caused him “tremendous stress and embarrassment”.

In a letter signed by Najib’s lawyer, Datuk Mohd Hafarizam Harun, Pua was told to publish a retraction and apology within 14 days in two national newspapers or face legal action for his speech recorded in the November 3 video: “Tony Pua: Najib is creating the biggest scandal ever in the history of Malaysia”.

The DAP national publicity chief was also told to remove the video from the Internet, stop further defamatory statements and pay Najib for the damages over his remarks.

Najib’s lawyers said Pua’s statements in the video “mean and were understood to mean” that Najib was an incompetent prime minister and leader of Barisan Nasional; creating the biggest scandal in the history of Malaysia; was a cruel, harsh autocratic not open to criticism; and was tyrannical and oppressive.

However, DAP secretary-general Lim Guan Eng said on Saturday that lawsuits would not stop the opposition's constant questioning and probing of issues relating to 1MDB. – November 24, 2014.