The Story:
Here’s the thing, Malaysia’s state-owned investment fund, 1MDB, was supposed to promote development. Instead, it has spurred a criminal and regulatory investigations around the world. To give you a quick gist, of the $8 billion raised for it, nearly $4 billion was pocketed – But guess what, its still a baby when you compare it to our 2G scandal which was $40 Billion being siphoned off! Check our Gyaan archives for more deets on it.
 
Back up, 1MDB sounds like some storage capacity, can you tell me what it means? 
It’s a government investment company which also goes by the name of 1 Malaysia Development Bhd. 1MDB wanted to revitalize Malaysia by building a new financial district, revamping its power plants – you know things that will bring in more better paying jobs and boost the economy. But an initial red flag was that 1MDB failed to attract foreign investment and so, it had to start raising debt. Quick side note  - debt raising is basically a country promising to pay the money back from the increased taxes it will collect when the said paying jobs roll in.  You should almost always focus on getting investment vs. debt when looking for funding – country or individual.
Anyway, it raised nearly $8 billion in debt from a TON of foreign countries with Goldman Sachs playing the lead broker for 1MDB.

Hmmm okay so what happened then? 
Well, the Govt. put a businessman by the name of Low Taek Jho (known as Jho Low and NOT to be confused with J Low!) in charge to properly diversify the funds raised in project. And Jho Low DID diversify the funds – just in the bank accounts of Malaysia’s ministers, PM and his own personal account.
 
Interesting and where is all this money? 
Scattered all over the world in various shell accounts of these minsters. Quite a few went into the Fendi, Gucci & Prada bags bought by the PM’s wife. The PM’s son went an extra mile and invested $60 million in the Wolf of Wall Street movie and  Jho Low was like “hold my cutting” and went above & beyond by buying a $200M super yacht that did nothing by just chilled on the waters of Bali – ALL of this at the expense of Malaysia’s tax payers!
 
Nandoo this sounds like chillar, why are you covering this? 
YES – it is chillar compared to the $40 billion involved in our 2G scandal (YAY us?) but the problem with 1MDB is that these folks borrowed money from foreign countries – like Abu Dhabi, Saudi Arabia, US, Germany, etc. And these countries are hella mad and going Rihanna mode with “B!^%$ better have my money!”  as in – I don’t care what your ministers did with all this money, I want MY money back or else…And so, Jho Low, PM, his fam and all other ministers are basically screwed with multiple international cases against them. While they wont be able to give the money back, they are in for some deep sheeet
 
Bottomline:
When you deal with global investments, you better be ready to pay up. If you think about it, one “good” thing with 2G scandal was that it involved only Indians and Indian ministers. No foreign party was involved which means, when things got crazy, nothing super terrible happened to anyone.

Tomorrow’s Gyaan:
Why Spain experienced a decline in child birth after instituting Paternity Leave

Episode 3: Malaysia’s 1MDB Scandal Explained

Nandoo