Khazanah Nasional said that it has no control over how the Finance Ministry had utilised the RM3 billion, a portion of which was reportedly used to pay off 1MDB's debts.
In a statement today, Khazanah confirmed that the Finance Ministry had issued an RM3 billion Redeemable Cumulative Convertible Preference Shares (RCCPS) in 2011.
Following this, RM1.8 billion was redeemed on March 14, 2014, while RM1.199 billion was redeemed on Aug 11 last year.
"The RCCPS is essentially capital injected that MOF as our 100 percent shareholder has a right to call back or redeem at any time.
"The redemption of the RCCPS is in effect a repayment of shareholder capital by Khazanah to MOF," said the fund.
According to Reuters, the RM1.2 billion redeemed last year was used to pay 1MDB's dues to Abu Dhabi's International Petroleum Investment Company (IPIC) as part of a settlement agreement.
1MDB was due to pay US$628.75 million (then approximately RM2.69 billion) to IPIC by July 31 but the deadline lapsed.
An extension of the deadline sought by Putrajaya resulted in a partial payment of US$310 million (approximately RM1.2 billion) made on Aug 11.
Yesterday, Finance Minister Lim Guan Eng said 1MDB officials have acknowledged that the company was now "insolvent" and was unable to pay RM143 million in interest payments due on May 30.
Lim had also revealed that 1MDB received close to RM7 billion in bailouts from the previous BN government. -Mkini
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