COMMENT | Recently, Abdul Khalid Ibrahim attended a private briefing which the CEO of 1MDB, Arul Kanda Kandasamy held especially for PAS. He then issued a press release which sought to cavalierly white wash important concerns that the rakyat have regarding 1MDB.

Making clear that he is satisfied that 1MDB will generate enough value to clear its debts, Khalid brushed aside allegations that:

a) the rationalization exercise by the government for 1MDB was equivalent to a US$42 billion mega bailout and b) 1MDB is unable to perform its financial commitments and obligations because of misappropriation and leakages and claims to have focused the discussion on the debt restructuring plan of 1MDB.

He claims that the debt restructuring is “in good progress [and] the issue of bailing out 1MDB is [therefore] irrelevant”.

Admittedly, Khalid is a good friend. But l just couldn't resist the calling of my inner conscience. He has said his piece and it is now my turn to rebut.

All that Khalid has told us on value creation is that 1MDB is riding on general economic growth to deliver a capital gain in due course and that this is borne out by the net present value (“NPV”). May we remind him that the NPV is what is in Arul'smind?

Did he actually study the NPV calculations? Whether the expected surplus will eventuate depends on more than a few variables, including those that are uncontrollable. Crucially, nothing in Khalid’s press release gives any impression that he asked Arul about 1MDB’s business plan in any detail.

The debt restructuring plan does not deny the existence of a bailout. It is an integral part of it! Now in its initial and development stage but crippled, 1MDB can:

a) arise only with the help of the government and its foreign partners; and

b) service interest under the debt restructuring plan only because the government continues its drip-feed of cash and insertion of credit support into 1MDB; and

c) hive off assets to 1MOF only because debt holders in 1MDB already had or were newly given guarantees and indemnities acceptable to them.

All these are the hallmarks of a bailout!...