Use Arab donation to rescue 1MDB, Mahfuz tells Najib

A PAS lawmaker has suggested that Prime Minister Najib Abdul Razak fork out US$50 million from his RM2.6 billion political donation to settle 1MDB’s outstanding interest on its US$3 billion bonds.

This is amid the possibility of 1MDB facing default as it had yet to pay the sum which was due on April 19 and its guarantor for the bonds International Petroleum Investment Company (IPIC) is also refusing to pay after accusing the Malaysian fund of still owing it over US$1.1 billion.

"Does Datuk Seri (Najib) have the money to pay? Give it to us.

"Even if we wanted to help, we don't know any Arabs to ask donations from.

"So I hope that Datuk Seri will quickly pay up. Don't allow the rakyat to bear the government's shame of not paying its debt," said Mahfuz Omar in a statement today.

The PAS MP was referring to the colossal sum which was deposited into Najib's personal bank accounts prior to the last general election.

The prime minister claimed the money was a political donation from Saudi Arabia, while the Saudi foreign minister also said his government was aware of the donation and that it was given without expectation.

Attorney-General Mohamed Apandi Ali, who cleared Najib of wrongdoing, claimed US$620 million of the money was returned to the alleged donor.

Despite this, the prime minister’s detractors remain unconvinced while a recent Wall Street Journal article suggested that money from a phoney firm to which 1MDB had transferred a large amount to could have ended up in British Virgin Islands-based Tanore Finance Corp, the same entity which wired US$681 million to Najib’s personal accounts.

1MDB has a five-day grace period to settle the interest payment after its due date, while the firm’s president and executive director Arul Kanda believes that the issue would be resolved amicably.

Meanwhile, Mahfuz pointed out that if 1MDB goes into default, it would trigger a cross-default.

"If a cross default happens, then the creditors can demand immediate repayment before the maturation period," he said.

He added if the other loans which require early repayment are guaranteed by the government, then it would be exposed to the obligation and liabilities.

"Where are we going to get the money to pay? Is there any left over from the RM2.6 billion that the Arabs gave?" he said. -Mkini