Tony Pua – How to take down a SWF?

Najib is suing Tony Pua, a DAP MP from Petaling Jaya Utara and Chan Chee Kong, the owner of MediaRakyat website for defamation, for slandering him in the 1MDB controversy.  What the outcome of this legal suit is another exciting court drama in Malaysia and may drag on and gain infamy like the Anwar case.

What is important is the immediate impact of what Tony Pua and his peers had done, to bring down the 1MDB ‘sovereign’ fund. The PM Najib has ordered an investigation into the operations of 1MDB and the winding down of its activities plus the sale of its assets. The 1MDB has ‘become a hot potato for the Malaysian government. It was just too much to handle’ according to a report in the Star paper. With the fire sale, what would be left of the 1MDB would be just a skeleton with everything stripped off. Several hundred million ringgits of assets and investments just went pooped and it was all over. Not sure about the reported RM42b debt.

Such big funds are usually managed by a team of professional managers, the lucky people that got to gamble with OPMs with little responsibility and at most losing their jobs. They gamble with other people’s money, not their money, and imagine the kind of opportunities these lucky people have to line their pockets with the payments from all parties, the buyers/sellers of assets and investments, and their employers paying them good salaries plus big bonuses when the gamble was right?

And the good thing is that many of them would not be sacked even if they lost big money as long as no fraud was discovered. They became valuable assets for the expensive training fees paid for their mistakes and wrong bets. They become indispensable for the experience of losing big money.

In the 1MDB case, it was just bad luck that there were Tony Pua and the social media to expose the doubtful and questionable investments made. If all this was hidden, undisclosed, no one would be wiser. The 1MDB could even churn out financial reports after reports to show how profitable were their investments. Who is there to check on the real stuff, who is there to check and confirm that it was really making big losses and all the reports were merely cover ups?

The truth would be revealed in the investigation ordered by Najib. I bet he would assign an independent committee and not cronies to do the investigation. I bet the opposition leaders would demand to be a party to the investigation or to insist on an independent committee, not appointees of the govt. If not, then it would be no different than a kangaroo court with kangaroos doing the investigation.

There is really very big risk in the management of a sovereign fund when the money is OPM and the professional managers are employees who are also human beans and at times would behave like human beans when the temptations are sexy enough. The need for transparency cannot be overstated. Without transparency, no one really knows what is going on.

Malaysia is lucky in this sense, that Najib also believes in transparency and there is real opposition in Parliament to demand transparency. Otherwise, 1MDB would still be happily playing with OPM until the cow comes home and more and more OPM would be injected into the fund for the fun of the management and their patrons.

Tony Pua and his peers could claim one down and more to go.