KUALA LUMPUR: Finance Minister Lim Guan Eng’s allegations that the ministry, Khazanah Nasional Bhd and Bank Negara had to bail out 1Malaysia Development Bhd (1MDB) to the tune of RM7 billion is not only misleading, but politically-motivated to obscure the facts.
Former prime minister and finance minister Datuk Seri Najib Razak said, in accordance with the recommendations of the Public Accounts Committee (PAC) Report on 1MDB, all of 1MDB's valuable and strategic real estate assets were transferred to other companies owned by MOF Inc.
“Over time, these prime real estate assets can be worth up to more than RM30 billion. However, although MOF Inc took over the assets, the debt or liabilities of 1MDB remained in the company. “Accordingly, the arrangement, as I can confirm, is for MOF Inc to service 1MDB debts, but in return for taking over the assets. Put another way, had those assets remained in 1MDB, it could have developed and sold the assets on its own, and used the proceeds to pay its debt,” he said in a Facebook posting.
Najib said MOF could use various methods to fulfil its obligations, including selling of the land or collecting debt repayments, for example, from Khazanah.
“There is nothing wrong with such transactions, as each was approved per the relevant governance frameworks, were conducted on at) an ‘arms length’ basis and followed the correct laws and procedures.
“Therefore, the question of MOF or BNM or Khazanah bailing out 1MDB does not arise at all. It is in fact downright misleading to make such allegations. MOF Inc took over assets and it must be responsible for the liabilities – that is the only correct way, legally and accounting-wise.”
Najib said it was wrong of Lim to only highlight 1MDB debts without also informing the public about its assets that have been taken over.
“The (Finance Minister) must ‘walk the talk’ on CAT (competency, accountability and transparency). He has to be transparent to tell the full story and not just half a story in order to deceive.”
On Thursday, Lim had told reporters that government-linked companies and government agencies had come under various pressures to facilitate repayment of 1MDB debts.
He had added that BNM and Khazanah money was used to pay 1MDB’s debts to International Petroleum Investment Co (IPIC) to the tune of RM6.975 billion as 1MDB had been unable to pay up.