Monday, November 2, 2015
Borrowing is part of doing business
Salleh Said Keruak
In his latest Blog posting today, Tun Dr Mahathir Mohamad commented that if 1MDB had not been created then it would not have needed to borrow RM42 billion. If a multi-billion business can be done without the need to borrow money then we would not need banks. All the banks can be closed down.
Even the PLUS North-South Highway not only needed to borrow money but it also needed a government grant. And it charges users toll to drive on the highway to pay back what it borrowed. And did not Perwaja, a company that failed, also need to borrow large sums of money?
Dr Mahathir alleges that Prime Minister Najib Tun Razak should be charged for sabotaging Malaysia’s banking and financial system. In what way did the Prime Minister sabotage Malaysia’s banking and financial system? Can Dr Mahathir explain? Unfortunately Dr Mahathir’s allegation does not state these details.
It must be remembered that 1MDB had tabled a full report during a Cabinet meeting in June this year. After explaining its rationalisation and debt reduction plan, which included the proposed IPO to bring in cash, the plan was approved. Then, the following month, the Special Task Force confiscated 1MDB’s accounts and documents, which delayed the exercise that would have turned 1MDB around.
About the matter of 1MDB getting land cheap and making a profit on that land, naturally undeveloped land would be cheaper than land that has already obtained planning approval and where the infrastructure has been completed. For example, even Petronas got land cheap in Paka, Terengganu, but after developing that land it is now worth thousands of times more what the land originally cost.