Monday, April 24, 2017

1MDB -IPIC settlement: 1MDB insists that IPIC will be paid out of "units" guaranteed by IPIC itself:-IPIC now implicated in money laundering

by Ganesh Sahathevan 

Image result for ipic abu dhabi
As reported by The Star:

1MDB said on Monday that as per the settlement, 1MDB will, amongst others, make certain payments to IPIC and will assume responsibility for all future interest and principal payments for two bonds issued by 1MDB Group companies due in 2022.

“These obligations will be met by 1MDB, primarily via monetisation of 1MDB-owned investment fund units. 

“1MDB is pleased to confirm that a first tranche monetisation of approximately US$50mil has been received, in cash.

“This arbitration settlement and monetisation of investment fund units represents the resolution of a significant challenge, and is a major part of the 1MDB rationalisation plan, which is now at its final stages of conclusion,” it said.


According to the PAC Hansard, 1MDB's auditor Deloitte had testified: "We were satisfied on the guarantee given (backing the investment units), and Aabar is a subsidiary of IPIC, and IPIC credit rating is double ‘A’. We checked on that.”

"I think the guarantee is very important because it forms a basis of the valuation," said one auditor who testified.


Aabar, the IPIC subsidiary, also helped 1MDB during a disputed audit. According to the Malaysia auditor general’s draft report, 1MDB fired KPMG LLP as its auditor in late 2013 after the firm declined to sign off on 1MDB’s accounts unless it received more details about $2.32 billion the fund said was invested in a Cayman Islands account(aka the units)
Aabar stepped in and guaranteed the Cayman Islands funds, an official for Deloitte Touche Tohmatsu Ltd., which took over as 1MDB’s auditor, told a closed-door meeting of the parliamentary committee probing 1MDB, according to a transcript of the proceedings reviewed by the Journal. This guarantee was never made public. Deloitte later signed off on the fund’s accounts. KPMG and Deloitte declined to comment.
IPIC later denied ever having any such guarantee,  rendering the units worthless.Nevertheless, it is these same "units" that 1MDB claims have been "monetized" and are the source of funds for its first  and second tranche of payments of IPIC.
This matter has been made public since at least last Friday,and IPIC has not refuted any of the claims made by 1MDB,and in media quoting sources close to the the settlement negotiations.IPIC does however admit to receiving funds from 1MDB, which 1MDB says are from IPIC guaranteed "units".IPIC cannot now claim not to be part of the ongoing 1MDB money laundering.
The evidence against IPIC includes the 1MDB financial statements audited and signed-off by Delloites.



In July 2016 IPIC denied ever guaranteeing "fund units" which are central to its settlement with 1MDB:Units worthless without the guarantee

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