Around our country this past week-1

I propose to touch on several events around the country.

1. The PM is pleased 1MDB made its first profit. It is RM 426 million.
2. Syed Mokhtar proposes to take over UEM and with it, PLUS and all highways.
3. Tengku Razaleigh's appointment as Director of Elections for Galas.

The PM says he is pleased. Because 1MDB, the sovereign fund formed probably on the advice of our 28 year old whizz kid from Wharton. MBA or just a first degree? No matter. The rakyat is also pleased with this development. They know the 1MDB had its origins from the Terengganu Wealth fund. It was called Terengganu Investment Authority initially.

It was to be the depository of Terengganu's petro Ringgit. Not safe people say. Whoever gets to control Terengganu will control it later. UMNO factious groups in Terengganu are fighting over it. More horrifying if Terengganu falls to PAS later. So, better hijack the Fund to be under control of Federal government. Make it 1 Malaysia Fund. That way, it's meant for everyone. Ini special punya. Even though we have Khazanah, the more national of our wealth fund. Let Azman play with Khazanah, we play with the 1MDB playdoh. (playdough)

Does not matter say the young advisers. So long as it's not controlled by the state. 1MDB was formed in March 2009 as the Terengganu Investment Authority (TIA) state wealth fund. The original fund size was RM5 billion from the federal government and another RM6 billion from the securitisation of Terengganu's future annual oil royalty. What happened to the millions before TIA?

So, the TIA had an original RM 11 billion war chest. RM 5 billion from the federal government through the issuance of bonds and RM 6 billion against the pledging Terengganu's 5% future oil royalties. Ini biasa what- you borrow against assured receipt of revenues.

But people quarrel over the fund. Rival factions in Terengganu. Idris Jushoh's Ghee Hin against Mat Said's Hai San. So, better bring it under PM's control. Make it the 1MDB. This way, the 'natang' people in Terengganu will not fight over the money. No sarongs lifted, no headgears dislodged. So, TIA subsequently became a federal agency in the middle of last year with its current name and mandate to pursue sustainable long term economic development.

After all that, we are told 1MDB made RM 426 million profit. Wah, bagus punya maa. Where did the profits come from? The CEO Sharol Hilmi said it was largely from the disposal of investments in its joint venture company with PetroSaudi and  some of it was from the effective management of treasury function funds in 1MDB.

Ahso, it's from the disposal of investments and earnings from treasury operations. Meaning, dividends. Something like what Berkshire Hathaway does I suppose. Place investments in blue chip companies and get returns. So how much is the RM 426 million profit came from sale of investment assets and how much from dividend earnings?

"It is our strategy to invest whilst seeking the best returns for our investment," said Shahrol. we can't dispute this strategy. But we want to know, this RM 426 million profit is made on the back of how much investments. Is it obtained on the back of RM 11 billion? The capital that's sunk into the Fund?

Tuan CEO don't be angry if people question the choice of Abui Dhabis' GLC- the MUbadala Group. They will invest USD 7 billion into the aluminium industry in Sarawak and in the development and construction of the RM26 billion KL International Financial District. Why Mubadala people asked? Ini simple thing sahaja what- construction and buildings. Any class A Bumi contractor can do. MMC or Gamuda who will dig tunnels can do. YTL can do. So why call in Pak Arabs?

Lu orang semua jangan bising. Jangan jadi arm chair critics. Lu orang apa tahu. We choose Mubadala because of its "very strong global partnerships and linkages with international blue chip institutions across several sectors, including services, banking and finance."

Aiya- chief, the group has registered a loss of 4 over billion dirhams (USD 1.22 billion) for the first half of 2010. That would dispute your claim that MUbadala has very strong global partnerships and has the investing savvy. So, you have signed with a party that is currently making loses.

But I would like to caution our this CEO. That is, if the man from Stanford Palo Alto wants to listen to a man who studied at Owens Manchester. When Mudabala people bring in the USD 7 billion, these will be reflected in our reserves. So people will be watching whether our reserves will swell by the investment instalments by Mubadala.

Then we are pissed off at people who says auditors refuse to endorse our books. They did, says the CEO pointing to the fact that the accounts had been fully audited and signed off by KPMG as of 31 March 2010 and two other audit firms – Deloitte & Touche which was involved in the valuation and analysis of 1MDB's portfolio and Ernst & Young which provided tax advice for 1MDB.

We said refused at first. Sharol took off from the signing. He was telling the truth. Technically speaking. If the books were signed in March, what was the accounting year? Financial ending year? March or 31^st December as is normal?

The market did not say has not be signed. What people are saying there was much reluctance to endorse the books at first. After much persuasion or perhaps given offers they can't refuse, auditors finally signed off. Publish and be dammed. Hopefully, no busybodies pick this up. If they do, dismiss them as arm-chair critics or even mad people.

Never mind. You do your damndest and we do mine.