Opening Speech By DAP Secretary-General And MP For Bagan Lim Guan Eng In The DAP State Annual Convention In Kota Kinabalu On 22.11.2014 Released Also In Kuala Lumpur.
DAP will stand solidly behind DAP National Publicity Secretary, Selangor DAP Chair and Petaling Jaya Utara MP Tony Pua against the defamation suit filed against him by Prime Minister Dato Seri Najib Abdul Razak pertaining to the 1Malaysia Development Bhd (1MDB) controversy. DAP National Legal Bureau Chairman and MP for Puchong will be tasked with assembling a panel of top legal practitioners to defend Tony Pua.
This is a historic case as this is the first time in Malaysian history that a Prime Minister is filing a legal suit against an opposition lawmaker. Clearly this will not be a routine defamation action relating to the personal standing of the Prime Minister but also possesses far reaching consequences for the political implications.
Even though the Prime Minister has only issued a notice of demand to Tony Pua, the Prime Minister clearly
had already made up his mind to go all the way and sue. As such, DAP does not wish to make further comments on the proposed legal suit by the Prime Minister but to let the courts decide.
However, DAP will not be detracted by the Prime Minister’s proposed defamation suit to desist from persisting with our questioning and probing of 1MDB. DAP will continue to press for a full accounting in the public interest, the financial viability and rationale of 1MDB, especially in using tens of billions of ringgit in debts to finance its business operations.
DAP hopes that whilst this suit by the Prime Minister is personal and private, the management decisions taken by 1MDB and the Finance Ministry is public and of national interest, will not stifle public discourse and choke off any media coverage on 1MDB when it involves RM41.9 billion in debt and RM 49 billion in total liabilities. Should this happen, then this would be a national disservice to 30 million Malaysians and contrary to the principles of transparency and accountability.
Excluding land revaluation gains and goodwill from purchasing its power assets of Independent Power Producers, 1MDB’s excess of assets over liabilities of RM2.44 billion would be wiped out, showing instead an excess of liabilities over assets of RM4.7 billion.
1MDB’s asset base increased to RM 51.4 billion in financial year(FY) 2014 compared with RM 44.6 billion in its FY 2013, with borrowings increasing from RM 36.2 billion in FY2013 to RM 41.9 billion in FY2014. 1MDB suffered a loss for the first time amounting to RM 665.3 million in FY 2014 compared to a profit of RM778 million in FY2013, mainly due to the rise in finance costs of RM 2.4 billion from the previous RM 1.6 billion. 1MDB’s profits in 2010 stood at RM424 million, 2011 was RM544 million and RM778 million last year.
However The Edge Malaysia estimated that 1MDB’s FY 2014 loss could have been larger at RM1.56 billion. Only by factoring in land revaluation gains of RM897 million, the losses were reduced to RM665 million. Land revaluation gains are not revenue or income generating and can only be realised by selling. As such, land revaluation gains cannot be used to service loans. The Edge revealed that 1MDB would have recorded losses in every financial year if the RM5.03 billion in land revaluation gains had not been factored in.
The Finance Ministry’s explanation that there is nothing to worry about 1MDB’s incurring huge debts of RM41.9 of debts because it has total assets of RM 51.4 billion is not only illusory and misleading but also false. The difference or excess is not RM9.5 billion. Total assets cannot be compared with total debt but must be compared with total liabilities, because debt is only one of the many components of liabilities. 1MDB’s total liabilities amounted to RM49 billion. This means an excess of assets of liabilities of only RM2.44 billion.
The Edge revealed that if we take out land revaluation gains and goodwill from purchasing its power assets of Independent Power Producers, the excess of assets over liabilities of RM2.44 billion would be wiped out. Instead 1MDB would show an excess of liabilities over assets of RM4.7 billion. This raises the likelihood of a debt default and whether 1MDB has the capacity to repay its loans.
Whether 1 MDB possesses the funds to repay its loans and interest, as well as remain solvent, when its assets include public assets of the highest priority given in trust for national economic development and public interest, is the critical question of national importance.
LIM GUAN ENG