PM’s supporters don’t understand 1MDB’s ‘shady businesses’, says Dr Mahathir

Former prime minister Tun Dr Mahathir Mohamad says supporters of Prime Minister Datuk Seri Najib Razak do not seem to understand that 1MDB borrowed RM42 billion to dabble in ‘shady businesses’. – The Malaysian Insider pic, June 29, 2015.

Prime Minister Datuk Seri Najib Razak's supporters do not seem to understand that 1Malaysia Development Berhad (1MDB) had borrowed RM42 billion to dabble in "shady businesses", resulting in a loss of money, former prime minister Tun Dr Mahathir Mohamad said today.

In his latest blogpost on chedet.cc, Dr Mahathir said that in the process, a "large amount of money had disappeared", maintaining his stance despite recent claims that the arrest of former PetroSaudi executive Xavier Andre Justo cleared 1MDB from recent controversies due to alleged tampering in emails that were presented as evidence.

Dr Mahathir also pointed out a recent announcement in the London Stock Exchange that International Petroleum Investment Company (IPIC) would undertake some of 1MDB's debts in return for a transfer of assets.

"Curiously no mention has been made of which 1MDB asset will belong to IPIC. If it is the power plants or the land, it would mean that these assets are no longer 1MDB's to sell. So how does 1MDB recover the RM42 billion it has borrowed?" he asked.

He asked if Justo was about to reveal something "worse" than what the London Stock Exchange had already announced.

He added that the entire restructuring of 1MDB seemed to be about selling off assets to clear the RM42 billion loan.

"The money is to come from the sale of TRX (Tun Razak Exchange) and Bandar Malaysia land. 1MDB paid extremely low price for this land. But can 1MDB do so?" he asked.

He also said that the money was used by 1MDB to buy Independent Power Providers (IPP) at inflated prices.

1MDB is currently facing probes from the Auditor-General and also the parliamentary Public Accounts Committee (PAC) over its dealings.

Though the controversy started with the PetroSaudi joint venture, which brought into focus the alleged involvement of tycoon Low Taek Jho (better known as Jho Low), the problems engulfing 1MDB has since moved on to other areas, including its investment in the Cayman Islands, and its global bond raising exercise totaling almost RM11 billion, which was made with support letters from the Federal government.

The firm has maintained that the value of its assets can offset the debt, though its cash flow struggles have led to a restructuring exercise.

- TMI