Mahathir: Petrosaudi exec's arrest doesn't explain 1MDB-PetroSaudi joint venture

Dr Mahathir Mohamad being escorted out soon after a police officer stepping onstage to ask Dr Mahathir to stop speaking at the Nothing2Hide forum on June 5, 2015.
Dr Mahathir Mohamad being escorted out soon after a police officer stepping onstage to ask Dr Mahathir to stop speaking at the Nothing2Hide forum on June 5, 2015.PHOTO: SINCHEW

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - The arrest of Swiss national Xavier Andre Justo has nothing to do with the joint venture between 1Malaysia Development Berhad (1MDB) and PetroSaudi International (PSI), Malaysia's former Prime Minister Tun Dr Mahathir Mohamad said on Monday.

Dr Mahathir said Mr Justo's blackmailing of PSI and alleged tampering of documents emailed to news portal Sarawak Report did not explain why the troubled state investment fund 1MDB had to fork out a US$1.9bil loan to fund the failed joint venture with the Saudi petroleum company.

He said giving a loan to a joint venture partner which was found unsuitable would increase the risk and not reduce it, quoting Prime Minister Datuk Seri Najib Razak's written reply to Parliament last month, which stated that "the loan was approved to reduce the risk as compared to the equity holding held in the subsidiary company".

"When the JV (joint venture) was dissolved after only six months of its formation, it must be because 1MDB realised that the venture was bad. What it should do is to demand the equity and the loan amounting to US$1.9bil be returned. Instead it was converted into Murabahah notes," Dr Mahathir said in his latest blog posting.

He also questioned if the alleged payout of RM15mil to Mr Justo upon his dismissal from PSI was a bribe to keep him quiet.

"That is a handsome amount to pay an employee or director after he had done something wrong. Normally he would just be kicked out," he said.

He also took a swipe at Mr Najib's supporters who had asked his critics to apologise following Mr Justo's arrest.

"Apologise for what? The fact remains that vast amounts of money have disappeared. Can Justo bring all the money back?"

"Is Justo going to reveal there is anything worse than what the London Stock Exchange has revealed? So who needs to apologise?" he added.

Mr Justo, a former IT executive at PSI, was arrested by Thai police last week for allegedly leaking confidential documents on 1MDB's business dealings with PSI.

1MDB later claimed that the documents, which were sighted by Sarawak Report in its exposé of the deal, had been tampered with and were different from the original copies still held in PSI's database.