1MDB alive thanks to taxpayers’ money, says Tony Pua

DAP's Tony Pua says 1Malaysia Development Berhad (1MDB) has taxpayers to thank for its survival. – AFP pic, January 1, 2016.

DAP's Tony Pua today threw cold water on Prime Minister Datuk Seri Najib Razak's satisfaction with 1Malaysia Development Berhad (1MDB), saying the Finance Ministry-owned firm remained "alive" not due to its own business acumen and realised profits but because of taxpayers' money and government-related funds.

The Petaling Jaya Utara MP (pic, right) said he disagreed with Najib's New Year message in which the prime minister said 1MDB had overcome its major challenges by the end of 2015 as he had promised last June.

Pua agreed that 1MDB's 60% sale of Bandar Malaysia to a consortium for RM7.41 billion was "unquestionably profitable" and would certainly reduce some of the firm's debt.

But he added that the sale was funded by taxpayers because the federal government had given a prime piece of property to 1MDB at a "bargain basement" price of RM1.6 billion in 2012.

"All 1MDB did was to resell this piece of land to a third party for a profit to pay down its debts. 

"As anyone can tell, 1MDB has generated zero value to the Sungai Besi airbase as not a single stone has been laid on the piece of land," Pua said in a statement.

The disposal of 60% of Bandar Malaysia was made to a consortium comprising Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corporation (M).

1MDB in November also disposed of its energy assets Edra Global Energy to China Nuclear General Power Corp, which is said to have reduced its debts by up to RM17 billion. 

The disposal of these assets are part of 1MDB's rationalisation plan to reduce its RM45 billion debt.

"1MDB borrowed billions of ringgit, lost the money and had to rely almost entirely on prime government assets to pay down the debts," Pua said.

He added that it was a "lie" for 1MDB to claim its rationalisation exercise was completed.

He said 1MDB president Arul Kanda Kandasamy had failed to highlight that its rationalisation plan would only work if it could produce RM16 billion of assets to swap with International Petroleum Investment Company (IPIC) in June this year.

Arul Kanda had previously said the debt-for-assets swap was a first step in the rationalisation plan.

"In fact, if 1MDB fails to deliver the necessary assets to IPIC by then, the Finance Ministry is legally obliged to compensate IPIC.

He accused Najib and 1MDB executives of painting a false picture in saying the 1MDB scandal had been fully resolved.

"However, the facts speak for themselves – 1MDB remains deeply in debt, to the tune of RM20 billion despite the multi-billion-ringgit indirect bailout by the federal government."

In a New Year's message posted on his website yesterday, Najib had said 1MDB's major challenges were now behind it and all that remained was to complete the deals it had entered into and the final steps of 1MDB's rationalisation programme.

- TMI