Who is minding the store?
We haven't heard of the 1 Malaysia Development Fund nowadays. Yes, I am referring to the RM5 billion that is managed by the 1 Malaysia Development Board 1MDB. Yes, it's that Fund formerly known as Terengganu Sovereign Wealth Fund. Just who came up with the idea is uncertain. Rumors have it, that it was a young man called Mr. Low from Penang. Mr Joe Low.
Creative ideas are most welcome. PM Najib has said that creativity will be a main element in his coming economic model. Anyway, the Fund started with RM 1 billion. It later became RM 5 billion obtained through the issue of bonds guaranteed by the government. Normally an entity is allowed to issue bonds if it is rated highly by some credit evaluating bodies. Like Moody's Investor Services for example. The accreditation body is satisfied the bond issuing entity can repay the bonds when they mature.
There are cases too, when the bond issue is underwritten by GOD- government of the day. Governments of course can never go bankrupt. The 1 Malaysia Development Fund- just call it the 1 Malaysia Fund will get additional RM 6 billion when the oil royalties due to Terengganu will also be directed into it. This means it will have RM 11 billion war chest to play around with.
Just who are controlling the 1 Malaysia Fund? We know it reports directly to the PM. Although 1MDB reports directly to the Prime Minister, the sovereign fund will still have an eight-member board of advisors and a five-member board of directors.8 + 5= 13 members.
But will they be given a free hand to manage the fund? Or are they there just to grace the window? These people are drawn mainly from statutory bodies such as LTAT, Tabung Haji, FELDA etc. I have been informed some have already resigned from the board because they cannot stand excessive meddling.
But you retort- why should we tell you what we are doing? Especially to busy bodies like you people? Then we answer you- because we have been dismayed so many times when public money is treated as a private property. We have PKFZ which is the subject of intensive forensic investigation now and has become a public scandal. We are also disturbed by the customary practice of keeping everything very quiet until it becomes bad and blows off the lid. Most importantly we believed that public disclosure is the best form of accountability. Let it out in the raw and let the people judge. Some of the busybodies out there are pretty smart and perceptive.
The sovereign fund is said to be thought of by a character called Low. He is known among financial circles as Joe Low. He comes from Penang. He takes over where Patrick Lim left. I can imagine him say over a glass of Martini- hi, my name is Low. Joe Low. I prefer my drink shaken, not stirred.
He brought the idea of creating a sovereign wealth fund. It was probably meant as a solution to prevent the dissipation of Terengganu's Oil Royalties.
Now, this is another issue. Why did the TSWF- Terengganu Sovereign Wealth Fund suddenly become 1Malaysia Fund? HM The King seemed to have given his consent to the renamed entity. This federal wealth fund now takes over the money raised by KTIA headed by Shahrol Halmi. HM The King was very much interested when the TSWF was set up as he was royally chagrined over the usage of oil royalties due to Terengganu.
Because I think it's not safe to have the money parked in Terengganu. Warring factions in Terengganu will be fighting all over the place to gain control over the Fund. He must have realized that the previous state government spent the money frivolously. A lot too went missing and unaccountable. Even if the monies are placed under KTIA- meddling politicians can still make life for the managers miserable. And also perhaps, it is wiser to have the money under a federal entity because Mr. Low thinks; BN will not be the next state government.
Anyway- some other states may be thinking to set up their own SWF. Then they will ask the government to guarantee them. If you can do it to Terengganu, you most certainly can and must do for other states.
PM says, if these jokers come up with these equally creative ideas, his government will have nothing to do but issue guarantees and commit resources to ensure the fund is managed properly. He can't afford to, because the majority of his officers in the Treasury are more at home at eating kuacis ( eagle brand preferred) and chewing on chips at meetings. No way Jose, he says- let's have a Federal Sovereign wealth fund. And it's not Jose- its Joe. Joe Low that is.
We are not sure where this Low brought the idea to. To the PM or to his Majesty the King.
He probably brought the idea to both. As both his majesty and the PM are concern about the application of the oil royalties, it is logical that Low brought the idea to both. He goes over to the PM and tells PM, the King has sent him. He then goes over to see the King and says, PM sends him. Nice. Very nice.
I mean, it's not every day, HM the King calls up- Yo DSN, did you send Low over to me to speak on this and that? It's not every day PM calls up the King to say- A thousand pardons Your Majesty- did Your Majesty sent this sinkeh over?
This brings us to the interesting question- just who the heck is this Joe Low? Is he our Warren Buffet? The main stream media says he is a low key person. Well, after he splashed USD170k to fete the PM and his entourage in New York recently, he is not low-key any longer. He is a Big Key now. Which doors is he opening? And last week, he gave a private birthday party to the PM's wife at a leading hotel in Kuala Lumpur.
Much has been written about the merits of a SWF as a concept. I shall not repeat the observations made by many commentators. For example the Blogger Analyst at Large has written something noteworthy about this. Forget the fact that he doubles up as economic advisor for the DAP. He has raised cogent criticisms which deserve notice.
I am more concern about the shadowy group of young boys moving behind the scenes and appear to exert considerable influence on the PM. Most prominent is this Joe Low character.
We have seen the debilitating effects such intrusion and meddling on the morale of the officers and the damage caused to the previous PM. He was criticized by being overly compliant with the investment advice of one Patrick Lim. And the treasury people and even ministers were run over roughshod by a group of young highly educated boys infamously known as the 4th Floor boys.
Now and here, we have another shadowy group. Maybe it's not formal. But not less significant. Among them are Joe Low, one young Indian, and the son of a prominent Chinese tycoon. All of them are young and are said to be have unhindered access to the PM's wife.
They are said to have even attended briefings by treasury and Bank Officials. We need to recognize the dangers from the experience of the previous administration.
Obtrusive and incessant meddling into the running and management of the Funds can see our money being dissipated. Already at the inception of the 1 Malaysian Fund, RM 300 million has already leaked. For what purpose? To where?
If credible investments have not been made on account of meddling, we shall have to incur the payment of interest. That means our borrowed capital has not work to earn revenue from which to service interests let alone earn a conservative return of 5%. (That was what Sharol Halmi said) and I hope, this conservative expectation on returns is still adopted by the board members.
Some board members have left or resigned. They say this fund is too hot to handle. It could actually be, they saw the writings on the wall and could see where the Fund could end up. So, rather than being held accountable for something that will eventually be bad, better relinquish the honor of serving in that Fund.
The other cause of concern is why is the PM hesitant to exercise full control over the Fund? I mean, not personally but investing the board with total and unfettered discretion. Let the fund be answerable to Parliament.
took part in a mini photo shoot on a boat in Paris, France today (July 15).
The 29-year-old heiress was wearing a bright pink dress with a large diamond snake bracelet, tights and high heels as she posed for a photographer on the water with the Eiffel tower as a background.
Paris was spending the day on the boat with her sister Nicky Hilton and Malaysian millionaire Taek Jho Low.
Low is somewhat of a mystery man who has been spending a massive amount of cash at clubs around the world and is rumoured to be an adviser to some international corporations and then appointed to the board of Malaysian bank UBG Berhad last year.
source: http://www.fadedyouthblog.com/197536/paris-hilton-strikes-a-pose-for-malaysian-millionaire
Not much is known about the baby-faced Malaysian, but tales of his largess are swirling about and frequently as he has been dropping tens of thousands of dollars at hot spots around the city. Here's what we know:
: Cristal, which he'll buy for anyone who asks.
about the man's big-spending ways.
source: http://gawker.com/5401369/jho-low-manhattans-mysterious-big+spending-party-boy
