The 1MDB Story – as told by an average Kopitiam uncle
It's happening too close to us to ignore, so now's as good a time as any to get educated.
Hallo ah Mothership,
My name is Ah Ku. I write to you because last time you got teach me about that dunno what Greek Financial Crisis. Your explanation quite good la so hor, maybe you brudders can help me with this other problem I got la.
What problem? Big big problem la. So big until kena my whole housing estate kia angry already. But some of them, I also think they very confuse la. Dunno what dunno where so many thing happening, chut so many pattern until everybody mabok already.
Okay nehmind, I tell you from start to finish, maybe liddat will be clearer.
It all started back in late 2008, when one of the kopitiams in my estate (Terengganu) started a fund to invest and make more money for the uncles of that kopitiam (Terengganu Investment Authority).
Six months later, koptitiam uncles from all the kopitiams in the estate got together and elected Mr Nadeep (not his real name) as the chief of the Federation of all the Kopitiams to take care of us all. This Nadeep had good ideas and said to us that one day he can make our estate one of the best around, so that we can enjoy world class coffee and toast and that our kids will go the best schools.
Nadeep acted swiftly and took over the first kopitiam fund. He renamed it the 1st Kopitiam Dream Boat, or 1KDB for short (establishment of 1 Malaysia Development Bhd, 1MDB), saying that the fund must benefit all the uncles going to kopitiams, rather than that one particular kopitiam. It was the one fund to rule them all, he said.
Other Key Players
At this point, I should introduce other key stakeholders of 1KDB.
One of them is Jay Low (not his real name), somewhat of a whiz-kid in the world of investing. Jay Low is connected to Nadeep via the latter’s step-son, whom he went to university with. Jay has an array of connections in the world of private equity, politics and even in Hollywood. He was also involved in the setting up of the original single-kopitiam fund.
I will get back to him later.
The Beginning of the End
To be fair, from very early on, there were people within the Federation of the Kopitiams (Malaysia) who challenged Nadeep on how 1KDB was run. They claimed that profits from the fund were made from shady transactions or simply by “cooking the books”.
1KDB then hired international audit firms to review the books, but there were more questions asked as it had changed three different auditors in its first four years of existence. We uncles understand that there is nothing wrong with changing auditor, but if everything was in good shape, why did the auditors not want to continue?
The first real cracks appeared in late 2013 when there was a delay on 1KDB’s part in publishing its financial statements. This got us kopitam uncles suspicious — What? Why need to delay? Got something to hide never hide properly issit?
Our worst fears were confirmed when 1KDB’s 2014 audited reports showed that it had debts of nearly US$15 billion. What? How come so much debt? We thought the fund was doing well all the time?
It was like a bomb hit all the kopitiam uncles when Dr Maradia (not his real name) started to come back to the kopitiam area and speak openly against Nadeep. We all had respect for Dr M (I now call him that hor, faster) in the years before his retirement and he had often considered Nadeep as his tu di.
Dr M continually kaopei the 1KDB, then say the fund made contentious profits through transfers of assets, and that the fund willingly entered unfavourable joint ventures (like the US$2.5 billion venture with PetroSaudi International) for the benefit of certain individuals.
Then one day, a bigger bombshell was dropped when we saw in that some ang moh paper (The Wall Street Journal) that 1KDB had actually transferred money (US$700 million) to Nadeep for his own personal use. Other online media (Sarawak Report and The Edge) even published details of their full investigation into the matter.
They both provided evidence to back their claim that Jay Low had much to do with several 1KDB investments and had used several layers of fund transfers to hide the fact he had benefited personally from his assistance to 1KDB. His personal relationship to Nadeep now kena scrutiny lor.
It was alleged that several different banks from different estates (various bank accounts within Malaysia) were used for 1KDB to devise an elaborate scheme to trick every uncle in the kopitiam.
Nadeep’s council of chiefs (the Malaysian government) has ordered full investigations into 1KDB (the multi-agency probe led by police and Bank Negara Malaysia — Malaysia’s central bank). Naturally, with Dr M on the attack against Nadeep, things among his council of chiefs, and also his clan (the ruling party Barisan Nasional), now buay steady.
Some journalists, opposition politicians and others within the kopitiam also kena arrested on charges of stirring shit throughout last year. Other uncles tried to lighten the mood by creating Nadeep and 1KDB-related movie posters.
One time, right, the mata was called in to break up a Dr M speech at the kopitiam. The funny thing was, the event where Dr M was speaking about the 1KDB (Nothing2Hide, organised by Malaysian Volunteer Lawyers Association) was supposed to be helmed by Nadeep, who apparently pangsehed at the last minute.
Elsewhere, banks from other estates started to freeze accounts linked to 1KDB (Singapore froze two local bank accounts) and not a day goes by without another damning article in the ang moh newspapers on this.
The business at the kopitiams has also suffered. We aren’t selling as much coffee and toast and stuff which we had to buy from other estates have shot up in prices (Fall of the Ringgit). We feel that right now, we are further away from the world-class estate dream promised to us than ever before.
Dear Mothership, do you have any advice for us uncles on this?