PKR federal lawmaker Wong Chen wants Prime Minister Datuk Seri Najib Razak to clarify if a private equity fund earned RM300 million for six months of paperwork in a deal linked to 1Malaysia Development Berhad (1MDB).
The private equity fund was Yurus Private Equity I, LP, which in April 2014, entered a master joint venture agreement with 1MDB Synergy Sdn Bhd on the proposed development of solar power plants that could generated up to 500MW in Malaysia.
Six months later, on October 2, 2014, 1MDB announced that it had brought from Yurus a 49% rights under the master joint venture agreement for US$69 million (RM300 million).
But following denials by 1MDB and Najib recently about any joint venture with Yurus, Wong today asked if this meant that private equity firm had made RM300 million just for doing paperwork.
"I, therefore, urge the prime minister to again come clean on the matter and disclose more to the public about the owners of Yurus so that we all can assess whether it had handsomely profited RM300 million after a mere six months of paperwork.
"To avoid embarrassment to all parties, the disclosure must be urgent and complete before US President (Barack) Obama arrives in Malaysia," he said in a statement today.
Yurus is linked to American firm DuSable Capital Management LLC, which earlier in 2013 had assisted 1MDB in project development of utility-scale, grid-connected solar power generation.
After 1MDB, via its wholly-owned unit 1MDB Synergy, entered into the master joint venture agreement with Yurus on development of solar power plants in Malaysia, DuSable was appointed as investment adviser to Yurus.
1MDB's links to DuSable was first raised last month by Wong, who demanded that Najib, the finance minister and chairman of 1MDB's advisory board, state the latest status of 1MDB's solar power plant project with DuSable in Kedah and the key conditions of the agreement.
The question was in relation to a report in an English daily on the joint venture project last year, which said that DuSable would be the investment adviser to a private equity fund in which 1MDB would be a limited partner.
In a parliamentary written reply to Wong, Najib said 1MDB had never signed any joint venture agreement with DuSable.
1MDB also issued a joint statement with DuSable last night, saying that while the two entities had discussed working together to develop a 50MW solar power plant in Kedah, no definitive agreement was ever reached about the project or any other solar power project.
Instead, 1MDB Synergy, entered into a master joint venture agreement with Yurus on April 11, 2014 to jointly develop solar power plants in Malaysia, and DuSable was appointed Yurus' investment adviser.
The master joint venture agreement shareholding was 49% Yurus and 51% 1MDB Synergy.
On April 12, 2014, however, 1MDB, via its wholly-owned subsidiary 1MDB Solar Sdn Bhd, entered into a power purchase agreement (PPA) with Tenaga Nasional Berhad for the construction of a 50MW solar power plant in Kedah, Malaysia.
"It is important to highlight that Yurus and DuSable were not and never were, signatories to this PPA, nor did either party, at any time, have ownership of 1MDB Solar," 1MDB said. – November 12, 2015.
1MDB explains solar ties with US firm
Published: 11 November 2015 10:59 PM
1Malaysia Development Bhd (1MDB), in a joint statement with DuSable Capital Management LLC, says while the two entities had discussed working together to jointly develop a proposed 50MW solar power plant in Kedah, no definitive agreement was ever reached about the project or any other solar power projects. – Reuters pic, November 11, 2015.1Malaysia Development Bhd (1MDB), in a joint statement today with DuSable Capital Management LLC, said while the two entities had discussed working together to jointly develop a proposed 50MW solar power plant in Kedah, no definitive agreement was ever reached about the project or any other solar power projects.
According to the statement titled "Factual Clarification on 50MW solar power plant in Kedah, Malaysia", 1MDB engaged US private equity firm DuSable in 2013 to assist with project development of utility-scale grid-connected solar power generation capability, "for which DuSable was remunerated US$506,000 for costs and expenses".
Then on March 18, 2014, 1MDB was granted, via a letter of award from the Ministry of Energy, Green Technology and Water (KeTTHA), the right to develop multiple utility scale solar photovoltaic power plants, with an aggregate capacity of up to 500MW.
"However, 1MDB was required, amongst others, to undertake detailed feasibility studies, execute a Power Purchase Agreement (PPA), source equity and debt financing, and procure other requisite approvals for each individual solar power plant," the statement read.
On April 11, 2014, 1MDB, via its wholly-owned unit 1MDB Synergy Sdn Bhd, entered into a master joint venture agreement (Master JVA) with Yurus Private Equity Fund I, LP (Yurus PE Fund), to jointly develop up to 500MW of solar power plants in Malaysia.
DuSable was appointed as the investment adviser to the Yurus PE Fund; the Master JVA shareholding was 49% Yurus PE Fund and 51% 1MDB Synergy, the statement read.
Then on April 12, 2014, 1MDB, via its wholly-owned subsidiary 1MDB Solar Sdn Bhd (1MDB Solar), entered into a PPA with Tenaga Nasional Bhd for the construction of a 50MW solar power plant in Kedah, Malaysia.
"It is important to highlight that Yurus PE Fund and DuSable were not and never were, signatories to this PPA, nor did either party, at any time, have ownership of 1MDB Solar," 1MDB said.
1MDB and DuSable subsequently engaged in discussion for a partnership to develop, finance and construct the proposed 50MW solar power plant in Kedah.
"However, no project level joint venture agreement was reached between the parties for this solar power project or any other individual solar power project," said the Ministry of Finance-owned strategic investment fund.
On October 2, 2014, as part of the initial public offering (IPO) plans of Edra Global Energy Bhd, 1MDB acquired the entire 49% interest of Yurus PE Fund in the Master JVA, for a final amount of US$69 million.
"This acquisition ensured that 1MDB and Edra would own 100% of the rights to develop up to 500MW of solar power plants, prior to the launch of a proposed IPO of Edra," 1MDB said.
"We trust the above clarification will address the unsubstantiated allegations being made by certain opposition politicians in Malaysia, who have selectively extracted and misrepresented information relating to 1MDB, in order to mislead the public for their political purposes," it added.
Last month, Kelana Jaya MP Wong Chen had demanded that finance minister Datuk Seri Najib Razak, who is also the Prime Minister and chairman of 1MDB's board of advisers, state the latest status of 1MDB's solar power plant project with DuSable in Kedah and the key conditions of the agreement.
The question was in relation to a report in an English daily on the joint venture project last year, which said that DuSable would be the investment adviser to a private equity fund in which 1MDB would be a limited partner.
In a written reply to Wong, Najib Razak said that 1MDB had never signed any joint venture agreement with DuSable. – The Edge Markets, November 11, 2015.
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