A QUESTION OF BUSINESS Desperation causes stupidity to rise to the fore.

Take 1MDB and the way it spins its so-called settlement with Abu Dhabi’s International Petroleum Investment Company (IPIC), the parent company of Aabar Investments PJS. There was a dispute and it was settled, but there was no renegotiation. 1MDB capitulated to all IPIC demands.

But this has been spun to give the false impression that all matters have been settled between the two. Ministers rushed to make statements about how the eventual settlement will be in favour of 1MDB and how it indicates that no money went into Najib Abdul Razak’s accounts.

Singapore's The Straits Times, which broke the news on the settlement, even preposterously reported that the settlement will make it more difficult for the US Department of Justice or DOJ to continue with its actions relating to 1MDB. It is difficult to see how because it caused no change in money flows.

The Straits Times reported that the “successful implementation of the proposed settlement could impact legal action being considered against 1MDB by foreign governments, including the DOJ.

“Bankers and legal executives (unnamed) familiar with the situation believe the deal could significantly dilute the international legal challenges confronting Prime Minister Najib Abdul Razak’s administration over the fallout from the 1MDB saga.”

The report continues: “...Here is why. The disputed monies in the Malaysia-Abu Dhabi row are central to legal suits brought by the US Department of Justice over the alleged misappropriation of funds from 1MDB. The Department of Justice claims that the funds siphoned from 1MDB went to fund purchases of real estate and other assets by associates of PM Najib.

“The settlement agreement between Malaysia and Abu Dhabi would achieve what is known in legal parlance as ‘no predicate offence’, the financial executives said.

“A predicate offence is a crime that is a component of a more serious crime and it is frequently applied in the US to actions involving the provision of funds for money-laundering and the financing of terrorism.

“Proponents of the settlement between Malaysia and Abu Dhabi argue that a successful completion of the deal would weaken the impact of any legal action taken by foreign governments over alleged money-laundering at 1MDB because of the lack of evidence,” The Straits Times said.

However, as it stands, US$3.5 billion is still missing and in dispute and IPIC says it never received the money. In this case, clearly the main offence is allegedly stealing money from 1MDB and the predicate offence is the laundering of part of this money in the US.

Everything that the DOJ has reported remains unaltered despite the settlement. Its case remains as strong as ever. The DOJ report says that US$3.657 billion was stolen from 1MDB (the main offence) and part of it was laundered in the US (the predicate offence)...