KUALA LUMPUR (March 12): Opposition coalition Pakatan Rakyat wants the Ministry of Finance to disclose details of a joint venture between its wholly-owned unit SRC International Sdn Bhd and Mongolia-based Gobi Coal and Energy Ltd.
Expressing alarm over similarities between the SRC and controversial 1Malaysia Development Bhd (1MDB, DAP Petaling Jaya Utara Member of Parliament Tony Pua said SRC's investment is a matter of concern as it had secured a RM4 billion Islamic loan from Kumpulan Wang Amanah Persaraan (KWAP) which was guaranteed by the federal government.
The loan was disbursed in two tranches in August 2011 and March 2012.
The latest financial statement stated that SRC International made a loss of RM164.4 million and had total liabilities amounting to RM4.34 billion.
In light of this, Pandan MP Rafizi Ramli said Pakatan Rakyat is mulling legal action against KWAP, Ministry of Finance, and panel members in the investment unit for failing to carry out their duty to ensure the pension fund of the people is invested wisely.
Interestingly, Pua said, the latest financial statements ended March 2014, were coincidentally audited by Deloitte Malaysia and were filed on Nov 5, 2014 to the Companies Commission of Malaysia, the same day as that of 1MDB’s after more than a month’s delay.
He questioned if SRC International's 50:50 joint venture with Gobi Coal and Energy is another multi-billion ringgit PetroSaudi-like scam waiting to be exposed.
Pua highlighted a few similarities between SRC International's investment and debt-ridden 1Malaysia Development Bhd (1MDB), including that there was no representative of MOF on the board of SRC International
"The circumstances around SRC International and 1MDB are perhaps just too similar, coincidental and suspicious to be ignored. We call upon the Minister of Finance to publish the joint venture agreement for Gobi Coal & Energy Ltd and give detailed financial status of the investment by SRC International.
"At the same time, we call upon the Auditor-General to investigate this highly mysterious company for any shenanigans together with the current special audit taking place in 1MDB," Pua told a press conference at the Parliament lobby today.
Pua said he had yesterday received a short written reply from the Finance Minister who is Prime Minister Datuk Seri Najib Razak, stating that "The investment was made jointly with international investors, with each owning 50%.”
However, Pua said, the minister refused to provide any other details, other than a statement that “every investment by the joint venture company is conducted in accordance to good business practices by taking a long-term perspective and considering the short-term volatile nature of market prices. At the same time, the company expects the prices and return on investment will increase in the longer term for natural resources.”
"The answer is scary because it sounded exactly the same when I had queried the Minister over the past few years about 1MDB's 2009 US$1 billion joint venture investment in PetroSaudi," Pua said.
SRC International has no representatives from the Ministry of Finance. The company is led by Nik Faisal Ariff Kamil with the three other directors being Datuk Suboh Md Yassin, Dato’ Che Abdullah @ Rashidi Che Omar and Dato’ Mohd Azhar Osman Khairuddin, he said.
It is worth noting that SRC International which was set up only in 2011 as a wholly-owned subsidiary of 1MDB, was hastily removed from 1MDB’s books before the end of March 2012, and parked directly under the Ministry of Finance.
"This modus operandi appears similar to how the PetroSaudi joint venture was terminated and converted into a loan on the very last day of the March 2010 financial year to avoid having to report the details of the venture. On both occasions, the auditors were again, coincidentally, KPMG," Pua said.