1MDB attempting to cover up massive losses by revaluing their assets, claims Rafizi

Pandan MP Rafizi Ramli says Putrajaya is trying to cover up the real losses recorded by 1MDB. – The Malaysian Insider file pic, November 10, 2014.

PKR today said that the controversial government-owned investment company 1Malaysia Development Berhad could face bankruptcy if it continued to record massive losses year after year.

Pandan MP Rafizi Ramli, who is a strong critic of the sovereign wealth fund, said Putrajaya was trying to cover up the real losses recorded by 1MDB by revaluing the entity's assets.

He revealed that for the financial year ending March 31, 2014, 1MDB had recorded a loss of RM665 million, which was based on its profit or loss and financial position statements that were audited and filed with the Companies Commission of Malaysia.

"For 2013, the properties revalued recorded an increase of RM2.74 billion which was recorded as profit. And for 2014, revaluation of 1MDB's properties and assets totalled RM897 million," he told reporters at the Parliament lobby today.

He said that if 1MDB had not revalued its assets in 2013, 1MDB would record losses of RM1.96 billion and for 2014, the losses would be RM1.56 billion.

He said the assets include the country's best properties – government-owned land surrounding the Sungai Besi military camp – which had been earmarked for development as the Tun Razak Exchange. These properties, he said, had been injected into 1MDB by the government.

The PKR deputy president said no government-owned entity has ever lost billions of ringgit such as 1MDB and called on Barisan Nasional lawmakers to "open their eyes" to the fact.

1MDB is Malaysia's second sovereign wealth fund after Khazanah Nasional Bhd.

Critics have long questioned its heavy debts, usage of funds and opaque operations.

In September, former prime minister Tun Dr Mahathir Mohamad wrote in his blog that 1MDB had already incurred a RM38 billion debt in just five years of its operations.

He was worried that Putrajaya, already facing a deficit budget, would not have the ability to help pay 1MDB’s debt.

He also said a large part of the money raised from the issue of debt paper by 1MDB was sent to the Cayman Islands, a move which many questioned.

In April last year, 1MDB brushed aside allegations that the investment was put in Cayman Islands companies and would vanish, saying they were baseless and an election ploy.

- TMI