Bold, Brilliant and Brutal Truth of 1MDB Revealed. Everything went straight to the Convicted Felon.

KUALA LUMPUR, June 15 — Despite being owned by the Finance Ministry’s Minister of Finance Incorporated (MOF Inc), 1Malaysia Development Berhad (1MDB) had skipped informing its sole shareholder MOF Inc and reported directly to then finance minister Datuk Seri Najib Razak instead on matters such as an investment and new debt worth billions in ringgit.

"According to the guidelines, MOF Inc had required all MOF Inc companies to obtain the approval of the finance minister before making any investments,” she said.

However, she confirmed that her division did not know and also was not informed if 1MDB had obtained approval for the investment with PetroSaudi International directly through the finance minister without going through her division.

"This is because the 1MDB management informed that they had directly reported matters regarding the running of the company to the finance minister who was also the prime minister,” she said.

Following the December 2009 meeting, Siti Zauyah said that the MOF Inc division had ordered for a due diligence to be carried out on 1MDB, as this due diligence was a way for the Finance Ministry to monitor the use of money that 1MDB had previously raised by taking on debts or issuing RM5 billion of Islamic bonds which are guaranteed by the government.

"I also confirm, during the period of this discussion, the Finance Ministry is not clear about the purpose of 1MDB’s investment with PetroSaudi International as 1MDB did not seek the views and consideration of MOF first before the joint venture was carried out,” she said.

Among other things, she also explained that a company taken over by MoF Inc cannot be closed down or have its MoF Inc status retracted, as long as that company has not finished paying off its debts.

She also highlighted that 1MDB had taken on the RM5 billion debt which had a maturity period of 30 years, noting that it would become the Finance Ministry’s responsibility to ensure this company continues to operate and carry out the company’s responsibility to pay that debt.

Snubbing of MOF again by 1MDB Later during 1MDB’s bid to obtain a letter of support to back its bid to take on US$3 billion in new debt in 2013, 1MDB also tended to skip Finance Ministry officials and go straight to Najib’s office, Siti Zauyah said.

By that time, Siti Zauyah was with the Finance Ministry’s loan management, financial markets and actuarial division.

"I still remember at that time, it was very hard for 1MDB to provide cooperation as if there are any difficulties or questions from MOF regarding that letter of support, they will directly contact and inform that matter to the Prime Minister’s Office as the finance minister.

"Although 1MDB and Goldman Sachs dealt with my division in the issuance of the letter of comfort, but they frequently communicated directly with the higher-ups if they were not that agreeable to requests or views from my division,” she said, clarifying that she was referring to the Prime Minister’s Office when she mentioned "pihak atasan” or the higher-ups.

1MDB initially was trying to obtain a letter of comfort from the Finance Ministry to enable the issuance of a US$3 billion bond, but requests kept coming in from 1MDB and Goldman Sachs to have the Finance Ministry issue a letter of support instead.

Eventually, Najib had agreed as the finance minister to the option of giving a letter of support along with other terms requested by Goldman Sachs, and had on March 14, 2013 signed the letter of support.

As 1MDB’s subsidiary 1MDB Global Investment Limited (1MDB GIL) had failed to make repayments on this US$3 billion debt, the Malaysian government currently is forced to bear the repayment of this debt, due to the letter of support.