Pua accuses Putrajaya of bailing out 1MDB over RM3.2b debt

Petaling Jaya Utara MP Tony Pua claimed Putrajaya has bailed out 1MDB by taking over RM3.2 billion of the state investment fund's debts.

This came after Finance Minister Najib Abdul Razak refused to give a direct answer in a parliamentary written reply on the status of the RM800 million loan Tun Razak Exchange (TRX) took from the Social Security Organisation (Socso) and another RM2.4 billion in sukuk bonds by Bandar Malaysia.

"I asked, did the Finance Ministry take over the borrowings associated with these assets, including the RM800 million from Socso and RM2.4 billion in sukuk bonds.

"This question only required a simple 'yes or no' reply, with the total borrowings assumed by the Finance Ministry, if any.

"What I received was a long grandmother story, which tried to obviously obfuscate the answer," he said.

The written reply said that 1MDB's assets, namely TRX, Bandar Malaysia, Air Itam and Pulau Indah lands, are to be handed over to the Finance Ministry Incorporated (MKD) as per the recommendation of the the Public Accounts Committee (PAC) report on 1MDB.

Pua said he had no issue with this, but when it came to the RM3.2 billion debt, the written reply also pinned it on PAC by referring to page 81 of its report.

'Not a recommendation by PAC'

"The statement on page 81 was actually the proposal submitted by 1MDB to the PAC and not a recommendation by the PAC," he said.

The written reply on the debt said the RM800 million by TRX City Sdn Bhd and RM2.4 billion by Bandar Malaysia Sdn Bhd "will be managed", whereby these would be borne by the existing cash flow of the projects.

"While Najib did not explicitly say 'yes' or 'no' to the above question, it is now clear as day that the Finance Ministry has effectively bailed out 1MDB to the tune of RM3.2 billion by taking over these debts.

"It also meant that Finance Minister II Abdul Johari Ghani's prior insistence to the media that there was no taking over of 1MDB debts planned over the assets takeover was a blatant lie," Pua said.

He said the Finance Ministry was now taking back the very same lands that it had sold to 1MDB for a fraction of its value.

He pointed out that the government had sold the 80-acre TRX land at RM64 per square feet (psf), totalling RM194 million and the 486-acre Bandar Malaysia land at RM72 psf, totalling RM1.67 billion.

"However, 1MDB has already sold parts of TRX to Tabung Haji and Armed Forces Pension Fund-owned Affin Bank for more than RM2,700 and RM4,500psf.

"In total, 30.5 acres of TRX land was sold for approximately RM3.5 billion.

"At the same time, 60 percent of Bandar Malaysia has been sold for more than RM1,000psf.

"The proceeds of these sales have already gone into the pockets of 1MDB to service its mountain of debt unrelated to its property division," said Pua.

1MDB had in December 2015 sold a 60 percent stake in Bandar Malaysia to a consortium comprising Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corporation (CREC).- Mkini