Who would imagine that a dry sounding ‘amicable arbitration agreement’ could twist and turn into such a farce of furious disagreements in just a matter of hours?

First, a minister in the Prime Minister’s office denied the 1MDB/IPIC agreement had said what it said. Mohd Puad Zarkashi ignored the Stock Exchange Statement, which clearly said Malaysia would take on the remainder of 1MDB’s debt repayments and suggested instead it might sue Abu Dhabi for $2.5 billion towards those costs instead.

Then the Second Finance Minister, Johari Abdul Ghani, waded in to further deny the basic premise of the agreement, by claiming also that Abu Dhabi did receive a $3.51 billion from 1MDB mainly in ‘deposits’ for its guarantees on the loans, saying that he had documents from the Seychelles to prove it.

In which case, cried Public Accounts Committee member Tony Pua, why had Johari agreed to the Prime Minister settling to take on the payments, instead of demanding that IPIC use the deposit money? Time to resign, cried the DAP Finance Spokesman!

Who was Pua to tell him to resign when Najib was his boss? retorted a furious Johari. The people are your boss, so serve them, replied Pua!

By this time even BN members of the Public Accounts Committee were agreeing with Pua on the matter.  Marcus Mojigoh announced that if Johari had documents he should make them public and stop undermining the basis of the settlement just agreed by his Prime Minister. If not, even Johari’s colleague was suggesting he should resign:

There should be consultation and collaboration between Johari and the prime minister,” he said…there were instances when ministers made statements that were inconsistent with the prime minister, giving the impression that the government is not working as a team.

“I am sorry to say this, but ministers went on to open their big mouths without consulting the prime minister. There should be teamwork instead of trying to be a hero…

Marcus said if members of the executive are not willing to cooperate with the leadership, then it would be best for them to step down.

“I think they should step down and create their own leadership. I am talking about what I am seeing in this country, not Johari alone,” he added.

Ooooh, what a spat!

By yesterday evening Pua had demanded a re-opening into the entire PAC enquiry into 1MDB based on Johari’s claims that he could now prove that the BVI version of Aabar Investments PJS Limited, which had been confirmed as a bogus vehicle designed to siphon money from 1MDB by the US DOJ last year, was in fact a genuine subsidiary of IPIC.

Because, if Johari and Puad are right, then why in the hell did Najib’s negotiators just agree to pay out $1.2 billion to IPIC and take on the rest of 1MDB’s $3.5 billion debt repayments?

Alleging that Aabar/IPIC was secretly planning to pay after all!

If all this wasn’t embarrassing, ridiculous and contradictory enough on the part of government big-wigs, Malaysia this morning woke up to an even more preposterous denial, thanks to another ill-conceived attempt at saving face. It came with a statement to the Straits Times that IPIC is secretly footing all the payments after all!

Najib’s spinners had been feeding lines about the settlement to the Straits Times all week, attempting to paint what is plainly a total victory by IPIC as a vindication for 1MDB.  First, ‘inside sources’ were reported telling the paper that the arbitration would ‘weaken’ the international criminal cases against those who thieved from the fund, on the basis that IPIC has formally agreed to be paid out of the sale of 1MDB ‘units’ widely dismissed as bogus also.

Except, when the settlement was announced there was no reference to any such agreement, just a straight demand that Malaysia pays $1.2 billion owed – the first half by the end of July.

With that line debunked, the Straits Times this morning reported a very serious new allegation being made by its ‘insider sources’ against IPIC, as a further attempt to give credence to the value of the bogus units in 1MDB’s Brazen Sky (allegedly representing a billion ‘redeemed’ from the PetroSaudi venture, via a Cayman Island ‘investment’) and also to money apparently missing from 1MDB Global.

IPIC had secretly agreed to buy the units, claimed the sources.  This way the sale of the units could be utilised by 1MDB to pay back what it owed IPIC!

So, having gone through all this arbitration and reached a resounding victory in the settlement, Abu Dhabi has allegedly agreed to pay itself back behind the scenes rather than take the money from Malaysia:

“According to senior financial and legal executives, the main hurdle was fund units amounting to US$2.43 billion (S$3.4 billion) held by two 1MDB subsidiaries, Brazen Sky and 1MDB Global Investments, that were guaranteed by IPIC subsidiary Aabar Investments PJS. Aabar had disputed the guarantee.

To overcome the hurdle, 1MDB agreed to waive its right to claim from Aabar the US$2.43 billion guarantee. In return, Abu Dhabi arranged for an undisclosed entity domiciled in the Seychelles to buy the units from 1MDB at the guaranteed value, to be settled by deferred payments from this month to October 2022, said a senior financial executive familiar with the matter.” [Straits Times]

As commentators are pointing out, this is an accusation that IPIC, which is a fund publicly listed on the London Stock Exchange, has agreed to participate in an illegal cover-up of a major theft from 1MDB and to secretly spend $2.43 billion on a valueless purchase, when it had appeared to have won a $1.2 billion settlement instead.

The allegation puts this ‘amicable agreement’ at serious risk, various commentators are now saying, because IPIC will have to respond to such a reputational issue.

Effectively, Najib’s spinners are trying to pretend that IPIC conceded in secret to everything they have publicly denied and are furtively paying up behind the scenes. It doesn’t get more far fetched than that and Najib’s supporters are acting like headless chickens.

They should shut up, before IPIC takes its revenge. A quiet and dignified management of this embarrassing settlement would have been a far wiser approach, leaving the Finance Minister to consider his limited options for finding the money.

He does not need these ministers digging themselves ever deeper into different holes, but it has made for some entertaining viewing for followers of 1MDB.