The Finance Ministry has refuted reports that T. Ananda Krishnan settled 1MDB’s RM2 billion loan in February. – The Malaysian Insider pic, March 14, 2015.1Malaysia Development Bhd (1MDB) used its own Cayman Island funds to settle its RM2 billion debt last month and not a loan from T. Ananda Krishnan, the Finance Ministry said.
The ministry said on Wednesday in a parliamentary written reply to Tian Chua (PKR-Batu) that 1MDB’s RM2 billion loan was settled early last month from its Caymans funds and not reportedly with the billionaire's help.
"Regarding the loan which 1MDB allegedly received from millionaire Ananda Krishnan, the report is not true," the Finance Ministry said in its written reply.
On February 13, The Malaysian Insider reported that the government-owned strategic investment fund had settled the loan with funds from Ananda Krishnan, six days before bankers were to trigger a default.
The loan was settled on February 12 with intervention from the tycoon, whose company Usaha Tegas had guaranteed it, according to those with knowledge of talks between Ananda Krishnan and 1MDB.
The lenders were Maybank, which had 58.99% of the RM2 billion loan, while RHB had 32.41%. The others were Alliance Investment Bank Bhd (4.06%), Malaysia Building Society Bhd (3.24%) and Hwang DBS Investment Bhd (1.29%).
However, 1MDB president Arul Kanda Kandasamy has dismissed talk of Ananda Krishnan's assistance as speculation.
The RM2 billion is part of a RM5.5 billion bridging loan to the relevant banks taken by 1MDB subsidiary, Powertek Investment Holdings Sdn Bhd to refinance a RM6.17 billion bridging loan taken in 2012. It was to part finance the purchase of power assets.
The ministry's written reply said that 1MDB had withdrawn its US$2.318 billion offshore savings in the Cayman Islands in two tranches, and had used the first tranche to pay back "loan interest, working capital and other scheduled commitments".
This tranche was US$1.215 billion, while the second tranche of US$1.103 billion was still kept in foreign currency at BSI Bank Limited Singapore.
The second tranche, the ministry said, would be used to repay loans in foreign currency that were due this year.
On Wednedsay, the Finance Ministry had responded to Tony Pua Kiam Wee (DAP-Petaling Jaya Utara) about the funds parked in the Singapore bank.
In a written reply, the ministry said the funds which were the balance of 1MDB's savings in the Caymans were better placed in the Singapore bank "to facilitate easier withdrawals" as regulations set by Bank Negara Malaysia for transactions over RM50 million were more stringent.
- TMI
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