Najib defends 1MDB, says not bankrupt

State investment vehicle 1Malaysia Development Berhad is not bankrupt, says Prime Minister Datuk Seri Najib Razak. – The Malaysia Insider pic, April 8, 2015.

Prime Minister Datuk Seri Najib Razak today reiterated that 1Malaysia Development Berhad (1MDB) was not bankrupt.

He added that the government-owned strategic investment fund had paid off its RM2 billion debt to banks Maybank and RHB.

In a brief written reply to DAP Jelutong MP Jeff Ooi, Najib who is also finance minister said the loan was repaid on February 13.

“For your information, 1MDB has settled its RM2 billion debt with Maybank and RHB on February 13, 2015, according to the terms of the contract.

“The issue of 1MDB being bankrupt does not arise,” said Najib.

In his question to the finance minister, Ooi asked whether 1MDB was already bankrupt because the debt-laden firm had repeatedly failed to meet its repayment deadline for its RM2 billion loan from Maybank and RHB.

He also asked why the Central Bank had yet to take action against 1MDB.

On March 25, Putrajaya announced it had set up a special task force to investigate the troubled state investor’s operations and its RM42 billion debt.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said he would be part of the task force, which also includes Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar; Chief Secretary to the Government Tan Sri Dr Ali Hamsa; and Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah.

This is besides the earlier task force announced by the Attorney-General (A-G), consisting of Inspector-General of Police (IGP) Tan Sri Khalid Abu Bakar, the Malaysian Anti-Corruption Commission (MACC), and the A-G’s Chambers.

Husni also announced then that 1MDB had used up some RM600 million of the RM950 million standby credit provided by Putrajaya, adding that 1MDB was expected to recover from the cash-flow problems that it faced by the end of this year.

Prior to that, Najib ordered the Auditor-General to "independently verify 1MDB's accounts", with the findings to be passed to a bipartisan parliamentary public accounts committee.

- TMI