1MDB: Dr M continues to level allegations, with no evidence

The Auditor-General and the Public Accounts Committee are the lawful authorities to probe 1MDB and verify on the company.

KUALA LUMPUR: 1MDB has expressed disappointment that despite having made various clarifications amidst two on-going probes on the company, former Prime Minister Mahathir Mohamad continues to level various allegations against it without at the same time offering even a shred of evidence.

“Both KPMG and Deloitte stood behind their audits during their recent appearance at the Public Accounts Committee (PAC) hearings,” pointed out the statement. “Mahathir continues to repeat the same questions and falsely claim that 1MDB funds were lost or unaccounted for.”

It reiterated that the Auditor-General (A-G) and the PAC were the lawful authorities to verify whether RM42 billion had disappeared from the company, “as they have access to all the information”.

The allegations by Mahathir and certain opposition politicians significantly impact the ability of 1MDB to conduct its business, it added. “At the same time, it causes damage to the wider economy.”

The statement went on to touch on the company’s rationalization plan, announced on 29 May, and claimed that it was negatively impacted by allegations when it was crucial in reducing the company’s debt levels to ensure maximum value was generated for its 100 per cent ultimate owner, the Government of Malaysia.

In a separate statement, 1MDB said that the notes to its financial statements explain allegations raised by the former Prime Minister on murabaha notes, and fund units in Cayman Islands owned via Brazen Sky. “There was a net gain of USD488 million on these transactions,” said 1MDB referring to the notes in its financial statements.

It added that it had already replied to Petaling Jaya Utara MP Tony Pua on its dealings with Abu Dhabi’s International Petroleum Investment Corporation (IPIC), “but Mahathir seems to be raising the same questions”.

“1MDB is engaged in final negotiations with IPIC to reach a deal. This is crucial in reducing the company’s overall debt situation by RM16 billion.”

Elsewhere, it claimed that its purchase of energy assets were based on taking a longterm view, and as advised independently by financial, legal, accounting, tax and technical advisors. “In addition, in taking a longterm view, 1MDB considered the social and economic impact on the country in arriving at a final valuation.”

It conceded that the purchases may have involved the payment of a premium in certain instance, but this was common in acquiring another business, “and was commensurate with their future potential and overall benefit to the nation”.

The statement also pointed out that the 1st generation owners of the energy assets in question were in fact granted lucrative, longterm, fixed price contracts during Mahathir’s time when he was Prime Minister. “We purchased the assets from the original owners.”

1MDB was also working on its 486 acre land in Sungei Besi, land parcels in Air Itam and Pulau Indah and on “monetizing” Edra Energy. “All these are meant to reduce the company’s debts significantly and generate maximum value to the government.”

The reference to monetization of Edra is the first time that the company has revisited the issue in recent weeks after having reportedly dropped plans for an IPO listing of the company.