PKR secretary-general Rafizi Ramli wants Bank Negara to disclose whether 1Malaysia Development Bhd's (1MDB) funds in the Cayman Islands have been repatriated. – The Malaysian Insider pic, January 28, 2014.
Bank Negara must prove that 1Malaysia Development Bhd's (1MDB) funds in the Cayman Islands have been repatriated by disclosing the local bank holding the funds and whether the firm has enough to pay off its RM2 billion debt, PKR said today.
PKR secretary-general Rafizi Ramli said the central bank had authority under the Anti-Money Laundering Act to disclose these matters.
He added that if the state investment vehicle had indeed repatriated the funds, it should be able to pay the RM2 billion it owed to local banks Maybank and RHB.
He told Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz to openly confirm if the RM7 billion in funds had truly been taken out of the Cayman Islands and returned to Malaysia; which local banking institution was holding the money; and whether the company has enough money to pay off its RM2 million debt to Maybank and RHB which it has sought a third extension.
"If Bank Negara is unable to confirm these, then it only strengthens speculations that the money was never brought back," he said in a statement today.
1MDB's group executive director Arul Kanda Kandasamy said the funds, totalled at around RM7 billion, had been taken out of the Cayman Islands and repatriated.
Rafizi said if the money had been brought back but the company still needed an extension to pay the loan, it only confirmed that the company was facing a cash-flow problem.
He said government bodies supervising the country's financial and banking systems, like Bank Negara, must accept that 1MDB was a company with financial problems and brought high risk to the nation's finances and its financial system.
"I understand that Zeti may be in a difficult position because 1MDB is backed by (prime minister) Datuk Seri Najib Razak. But the time has come for her to act independently and sternly to safeguard the interest of the people.
"Bank Negara's job is to ensure the best value for our currency and to safeguard the stability of our financial and banking system, not protect a troubled company like 1MDB," he said.
Rafizi also urged Bank Negara to reject 1MDB's extension request because allowing it would give a dangerous signal to the market when the value of the Malaysian currency was spiralling.
Considering the high indebtedness of 1MDB and the risk it posed to the stability of the financial and banking system, he said such a move would cause investors to take their money out of Malaysia, and subsequently hurt the ringgit further.
"If our sovereign rating plunges because of 1MDB, Bank Negara also bears responsibility for not being firm and transparent in dealing with the risk caused to the country's financial and banking system by the company.
"Since the situation is getting more complex with the latest extension request by 1MDB, I ask Zeti to spend some time with a delegation of Pakatan Rakyat MPs in two weeks' time to hear what we have to say about the company," he said.
DAP national publicity secretary Tony Pua also took 1MDB to task for requesting a third extension to repay the RM2 billion debt.
Pua said 1MDB was "holding Malaysian banks hostage by seeking a third extension for its overdue RM2 billion loan" and urged Putrajaya to conduct an audit of the company's 1MDB finances.
He said Putrajaya must audit the fund following its latest request for an extension.
Pua also questioned why 1MDB couldn't have used the funds redeemed from the Cayman Islands to repay its loan.
- TMI
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