KUALA LUMPUR, Jan 1 — The reduction of 1Malaysia Development Bhd’s (1MDB) debt was the result of government and taxpayer bailouts rather than any business strategy, DAP’s Tony Pua said today.
Disputing the prime minister who yesterday said the worst was behind the state-owned investment firm, the Public Accounts Committee member also said that the latest sale of a 60 per cent stake in 1MDB’s Bandar Malaysia showed that all the firm did was resell land it acquired from the government at a discount.
“Firstly, 1MDB remains ‘alive’ today not because it survived through its own business acumen and realised profits. 1MDB remains alive today because the tax-payers and government related funds bailed out the excesses of the company.
“All 1MDB did was to resell this piece of land to a third party for a profit to pay down its debts. As anyone can tell, 1MDB has generated zero value to the Sg Besi airbase as not a single stone has been laid on the piece of land,” Pua said in a statement.
Pua further asserted that the debt-for-assets swap with Abu Dhabi’s International Petroleum Investment Company (IPIC) was not certain to realise the RM16 billion reduction in 1MDB’s debt as touted, rendering the entire rationalisation plan “a lie”.
The deal with IPIC was announced in May and described as the first step of 1MDB’s rationalisation plan that also included the sale of Edra Global Energy to a Chinese group and yesterday’s sale of Bandar Malaysia land to a Chinese-Johor consortium.
The Petaling Jaya Utara MP alleged that 1MDB was intentionally obscuring the fact that the transaction with IPIC requires the Malaysian firm to produce RM16 billion in assets by this June in order to realise the debt reduction.
“In fact, if 1MDB fails to deliver the necessary assets to IPIC by then, the Ministry of Finance is legally obliged to compensate IPIC,” he pointed out.
Prime Minister Datuk Seri Najib Razak yesterday said he fulfilled his pledge to resolve 1MDB’s issues in six months, after the firm sold a 60 per cent stake in Bandar Malaysia to a consortium comprising China Railway Engineering Corporation Sdn Bhd and Johor-based Iskandar Waterfront Holdings for RM7.4 billion.
The sale was the third and final step in 1MDB’s plan to rationalise its RM42 billion in accumulated debt. – MMO.