Watching 1MDB (part 1) - Where Najib's Malaysia Corporation Dream unfold.....

Introduction

1 Malaysia Development Berhad (1MDB) is a strategic development company, wholly-owned by the Government of Malaysia (link). 

It originated from Terengganu Investment Authority (TIA), with the aim of investing billions of ringgit in energy, real estate and hospitality sectors in the country, according to a statement from the Prime Minister’s office (source).

Since the inception of the company, 1MDB had been going through rapid expansion, including purchase of few notable power assets (Powertek, Genting Sanyen, Jimah) and undertake large commercial property development project (Tun Razak Exchange)

The Questions for Us
I didn't know the rationale behind Najib Govt's ambitious Malaysia Corporation Set-up. 
Maybe, 
They believe a sovereign-back company, can obtain lower borrowing cost for fund to finance  big project (like track 3B Coal Fire Power Plant or Global Financial District), thus benefit Malaysians in the end?

Maybe, 
They believe a sovereign-back company, can easily get govt to govt cooperation with other country like Middle East, China, Japan, thus bringing in huge amount of FDI into malaysia? 

Maybe, 
They believe by utilizing govt resource and support (land bank, govt to govt agreement, bond guarantee), they can build a profitable conglomerate, thus creating extra source of income for the treasuries (just like Khazanah)

Maybe, 
It is just a vehicle for Najib to bail out/cash out the cronies? 

But since this is a conglomerate own by Malaysia Govt that getting bigger and bigger, every Malaysian should be concern on the outcome of Najib's Govt Business adventure, especially in the following ways

i. How does the growing of 1MDB influences the private sector business and markets?
Will it crowd out private investment in energy sector?
Will it affects profitability of commercial property market and hospitability market? 

ii. How does the presence of 1MDB affect other Govt policy and Central Bank policy? 
As 1MDB undertake a huge commercial property project code name Tun Razak Exchange, 
Will it make govt and central bank more hesitate when introducing measures to cool off the properties market? 

iii. Can 1MDB achieves profitability not only in accounting term but also in economic term, that eventually govt need not bailing out/ repay their bond / injecting assets? 

iv. When 1MDB is getting bigger and bigger, hows their key management personnels selected and paid? 

The Thought
i don't particularly like Najib's idea of setting up a Malaysia Corporation, the real issue is, when the company is fully owned by Govt of Malaysia, the management of the company get a blank check in trying out all sort of business venture, without careful consideration of whether the business venture can generate adequate profit.

Hence, you see people with lack of experience venturing into the energy industry and commercial properties market, we will see a corporation that growing too big too fast, that its organization structure and good governance dont have enough time to develop, thus causing wastage, and rainfall profit for others doing business with them (like Ananda Krishnan, Goldman Sach and Negeri Sembilan Royal Family)

And when Govt extend its presence in private sector, you will see a government with increasing power,
which is not a good sign when you dont believe they can handle it....