1MDB can only be wound up after all debts paid, says Johari

Finance Minister II Johari Abdul Ghani said troubled sovereign wealth fund 1MDB has yet to enter the winding-up stage.

"It is not winding up but it is in run-off operation. We don't conduct any new business.

"We can't wind up the company until all the debts are settled and amounts due from disposal of assets are collected," Johari told Malaysiakini via a text message.

Last Saturday, Singapore's Straits Times quoted a senior government officer as saying that Putrajaya was laying the groundwork to shut down the state-owned firm.

Budiman Committee, a high-level government unit chaired by Johari, planned to transferred 1MDB's assets to two companies - Piramid Pertama and Aroma Teraju - which are owned by the Finance Ministry, in the coming months, according to the report.

The remaining assets are Tun Razak Exchange (TRX), Bandar Malaysia in Kuala Lumpur and a 94.7-hectare plot of land in Ayer Itam, Penang.

Over the past two years, the cash-strapped 1MDB has been ditching much of its prime assets.

In November 2015, it announced the sale of its energy arm Edra Global Energy Bhd to China General Nuclear Power Corporation for RM9.83 billion.

A month later, 1MDB announced the sale of a 60 percent equity in Bandar Malaysia to a consortium comprising Johor-based Iskandar Waterfront Holdings Bhd and China Railway Engineering Corporation for RM7.41 billion.

1MDB has also sold plots of land within TRX to Indonesia's Mulia Group, Australia's Lend Lease as well as to local government institutions such as pilgrimage fund Tabung Haji.

The move was part of 1MDB's effort to pare down its debt, which at its peak amounted to around RM50 billion. 1MDB's current debt load is estimated at US$4.78 billion (RM21.3 billion).

In November 2016, Minister in the Prime Minister Department Abdul Rahman Dahlan was quoted as saying 1MDB's debt stood at RM31 billion.

Asked if the balance of the 1MDB debt would be transferred to the government, Johari said, "At the moment, we have not received any request from 1MDB for any assistance."

Johari, who is also an Umno supreme council member, did not reveal how soon 1MDB would be wound up.

"I will reply you when we reach the stage," he said.- Mkini