Saturday, August 29, 2015

Malaysians Smell PEU

BBC reported:

Tens of thousands of Malaysians are protesting in the capital Kuala Lumpur and elsewhere, calling for Prime Minister Najib Razak to step down over a financial scandal. 

Protesters are angered by a $700m (£455m) payment made to his bank account from unnamed foreign donors. 

It was discovered last month during a probe into alleged mismanagement at the debt-laden state fund 1Malaysia Development Berhad (1MDB).
The article illuminated 1MDB:

What is 1MDB? 
• The 1Malaysia Development Berhad state investment fund was established under Prime Minister Najib Razak in 2009 to transform Malaysia into a high-income economy. 
• Critics say the fund overpaid for many of its investments and spent millions on fees to investment bank Goldman Sachs 
 • It began attracting attention at the end of 2014 when it started missing payments to creditors. It later emerged that the fund was mired in $11bn (£7bn) of debt. 
• Mr Najib has been accused of taking $700m from the fund - a charge which he has denied. 
 • Malaysia anti-corruption commission said it had verified that the money was a donation from unnamed foreign donors.

Malaysia's sovereign wealth fund started after the 2008 financial crisis. With the help of Goldman Sachs it took on $11 billion in debt.  The elected official who established the fund received $700 million from foreign donors yet to be identified.

No wonder masses hit the streets of Kuala Lumpur.  They're protesting the greed and leverage boys, which includes private equity underwriters, imitators like 1MDB and their sponsored politicians. 

Update 9-7-15:  Goldman's fee-a-palooza on 1MDB stinks to the average Malaysian.