By Jennifer Gomez From Malaysian Insider

Federal authorities like the Finance Ministry and Bank Negara should have foreseen 1Malaysia Development Berhad’s (1MDB) problems, the MP for Kuala Terengganu said today, as they had the benefit of seeing a “full-dress rehearsal” in similar problems faced by the Terengganu Investment Authority (TIA), the sovereign development fund’s predecessor.

Datuk Raja Kamarul Bahrin Shah said at the Parliament lobby today that 1MDB’s scandals could have been avoided if the regulatory bodies could have taken lessons from what happened to TIA.

He said the warning signs had been there, causing the Terengganu state government to opt out at the last minute.

“One of the reasons the state government decided to pull out is because they realised with RM5 billion made available to TIA, they would be paying RM800 million a year in interest alone for the fund and there was no project identified yet.

“So they anticipated they would have the same cash flow problem which we see now in 1MDB.

“So if Terengganu, a small state government with not much sophistication, could see that why did the federal government, Ministry of Finance, and Bank Negara not see it given that 1MDB had the same structure,” he questioned.

He also said that while TIA and 1MDB were different “movies”, they had the same actors – Datuk Seri Najib Razak, businessman Jho Low and Datuk Shahrol Halmi.

Raja Bahrin also said it was a farce that approval was needed to bring back US$1.1 billion into Malaysia but added that Low had said in emails exposed by website Sarawak Report that Bank Negara’s approval was not needed to move US$600 million to Cayman Islands.

He also said that although the state government pulled out when the loan was being syndicated to TIA, some actors were paid over RM200 million in commissions.

“The Terengganu state government got cold feet because no project was identified, but in the process of syndicating the loan, somebody got rich very fast, RM250 million had been paid out for nothing.

“Now the question is, who is taking over this liability,” he questioned.

Raja Bahrin said that while 1MDB was set up to replace TIA at the national level, it has turned out to be a nightmare now.

He also chided Putrajaya for breaching its own laws, by tabling the Anti-Money Laundering Act in Parliament last year, when at the same time it was transferring RM2.5 billion through 1MDB to the Cayman Islands.

“While we were busy in Parliament last year debating enhancements to the fine and jail terms on money laundering crimes, we got news that our own government was transferring state funds to the world capital for money laundering, Cayman Islands,” he said.

The lawmaker said he had raised in Parliament last year why the transfer of funds to the Cayman Islands had been approved.

He also noted the Finance Ministry’s statement in the current Parliament sitting that US$1.1 billion from 1MDB’s funds in the Caymans were now parked in a Singapore bank, and not brought back to Malaysia because of Bank Negara’s stringent requirements for withdrawals above RM50 million.

“The shocking thing is there is no issue in taking out RM2.5 billion out of the country but to bring the money back, approval is needed.”

He said given the extent of the scandal, there was no option but for Najib to step down as finance minister, adding that this call has been made since last year.

“Too much power is in one person’s hands, the same thing said by Sarawak Report’s (editor) Clare Rewcastle-Brown,” he said.

He said another troubling issue was Najib’s connection to Low, despite him not having any official position in 1MDB. – March 16, 2015.

IMAGE: PKR’s Kuala Terengganu MP Datuk Raja Kamarul Bahrin Shah says the foresight shown by the Terengganu state government in pulling out of the Terengganu Investment Authority should have been emulated by the Finance Ministry and Bank Negara. – The Malaysian Insider pic, March 16, 2015.

For more on this story go to: http://www.themalaysianinsider.com/malaysia/article/why-no-red-flag-over-1mdb-after-terengganu-experience-mp-asks-putrajaya#sthash.ZRF1vf0h.dpuf

See also iNews Cayman related story published March 15 2015 “Not Ananda’s money to settle 1MDB loan, says Treasury” at: http://www.ieyenews.com/wordpress/not-anandas-money-to-settle-1mdb-loan-says-treasury/