Were non-existent funds used to get RM3.6 billion loan for 1MDB, asks Rafizi

PKR's Pandan MP Rafizi Ramli sees problems in 1MDB repaying the amount due on its RM3.6 billion loan taken from six banks. – The Malaysian Insider pic, May 12, 2015.With four months to go for 1Malaysia Development Berhad (1MDB) to service its RM3.6 billion loan to six international banks, PKR’s Rafizi Ramli said he had received information that the troubled state investment fund listed its “questionable” account in BSI Bank Singapore as collateral.

Rafizi said that if this was true, 1MDB may have to resort to using public funds to meet the September payment deadline, since its account in BSI Bank reportedly had no actual cash.

On April 22, whistleblower Sarawak Report claimed that 1MDB’s account in BSI Bank merely contained “paper assets”, the “true value of which cannot be determined”.

“A loan as big as this would most definitely have collateral. The information I received is that the collateral for this loan is the funds in the BSI Singapore account, which was reported as being non-existent,” Rafizi told a press conference at the party’s headquarters today.

“If this collateral does not exist, there is a huge likelihood that 1MDB will need to raise funds from other sources to replace that collateral.”

He said Najib must explain how 1MDB intended to service its RM3.6 billion loan by September, given that the state investment firm was already in debt.

Rafizi said 1MDB had borrowed the RM3.6 billion from a consortium of six international banks led by Deutsche Bank in October last year, and that sources told him the interest rate was at 11% – which meant 1MDB had to pay around RM4 billion in debt to the banks within four months.

- TMI