Published on 11 September 2014 by Malaysian Insider.
Tun Dr Mahathir Mohamad has raised questions about the heavy debt and usage of funds at 1MDB in his first open criticism of the controversial government-owned investment company started by Prime Minister Datuk Seri Najib Razak.
Writing in his blog yesterday, the former prime minister noted that 1MDB had spent billions of ringgit buying power plants from Genting and Ananda Krishnan and had paid above market prices for them.
He also lamented that 1MDB is heavily indebted. It has debt of around RM38 billion after just five years in operation as the country's sovereign wealth fund.
"The money for 1MDB is not from the country's surpluses. It is debt, billions of ringgit of debt that has added to the already high national debt," Dr Mahathir wrote.
The former PM, who recently wrote he was withdrawing support from Najib, said as the government was already facing a deficit budget problem, it would not have the ability to help pay the 1MDB debt.
He also noted that a large part of the money raised from the issue of debt paper by 1MDB has been sent to the Cayman Islands, a move which many has questioned.
Critics have complained about the lack of transparency in how the money is managed out of Cayman and it has been estimated that at least RM18 billion of 1MDB's money is parked there.
1MDB is Malaysia's second sovereign wealth fund after Khazanah Nasional Bhd.
http://www.freemalaysiatoday.com/category/nation/2014/09/11/lim-agrees-with-dr-m-attacks-najib/
ReplyDeletePenang Chief Minister Lim Guan Eng concurred with the allegations of former premier Dr. Mahathir Mohamed that funds used by the 1Malaysia Development Board (1MDB) was sourced from heavy debts, not surpluses.
Lim said Dr.Mahathir was spot on in questioning 1MDB funds, cynically proposing that 1MDB should be termed the “1Malaysia Debtors Bureau”.
“I agree with what Dr. Mahathir says this time, as the money was all sourced from debts.
“This will eventually lead to a country that chokes with debts,” Lim told newsmen after launching the MyTeksi smartphone application in Esplanade here today.
Lim said the RM38 billion was not a small amount that could be taken lightly especially when it was sourced from loans.
“We have a culture of depending on loans here and are too reliant on loans,” he added.
Lim likened this dependence to a person’s over consumption of sugar which could lead to diabetes. He said if this dependence continued, like the diabetic person, the country would eventually collapse.
He claimed that the country’s debts had since doubled from RM266 billion in 2007 to the current RM542 billion.
http://www.themalaysianinsider.com/malaysia/article/putrajaya-fully-responsible-for-1mdbs-rm30-billion-debt-says-rafizi
ReplyDeleteThe Pandan MP accused Prime Minister Datuk Seri Najib Razak of misleading Parliament by claiming that the federal government's liability on the debt only amounted to the RM5 billion from the bonds it had raised.
Rafizi (pic) said Najib replied to queries by MPs by claiming other debts were not guaranteed by the government.
"However, I got certain documents that showed that the government liability actually extends to all the loan totalling RM30 billion. In other words, the federal government is the final party that is responsible for the debt should 1MDB default on its loan," he told The Malaysian Insider, adding that he will have a press conference next week to prove his claims.
1MDB is Malaysia's second sovereign wealth fund after Khazanah Nasional Bhd. Critics have long questioned the fund's heavy debts, as well as it usage and opaque operations.
In agreeing with Dr Mahathir, Rafizi said 1MDB's weak finances and lack of transparency in its operations posed a therat to the country's economic stabilty, especially since the fund failed to show any encouraging progress.
"If 1MDB fails to pay off its loan, the government of Malaysia is responsible to pay the debts and it will definitely use public funds to do so," he said.
He said he had received a legal letter from 1MDB directing him to stop raising the funds' lack of transparency or prepare for legal action.
http://www.businesstimes.com.sg/banking-finance/over-us2b-of-1mdbs-cayman-funds-managed-by-aussie-firm
ReplyDeleteAUSTRALIAN firm Avestra Asset Management has been managing over US$2 billion of 1Malaysia Development Bhd's monies invested in several Cayman Islands funds.