Pua: Did 1MDB try to cover up MOF payment to IPIC?

DAP lawmaker Tony Pua wants to know whether 1MDB had "carefully leaked fake news" to Singapore's Straits Times to cover up how it was the Finance Ministry which had forked out RM2.4 billion to settle its debt to Abu Dhabi's International Petroleum Investment Company (IPIC).

Malaysians, said Pua, are rightly concerned as to how 1MDB paid the latest instalment of its debt.

"All that is stated in the official 1MDB statement is that the payment is funded through its 'on-going rationalisation programme'.

"No one, of course, has a clue as to what the 'rationalisation programme' entails," said Pua in a statement today.

The Petaling Jaya Utara MP noted how "carefully planted leaks" to the Straits Times had instead revealed that the funds to repay IPIC came from the sale of investments in financial instruments and stakes held in two 1MDB-related entities that own tracts of land in Penang and Pulau Indah, Selangor.

The report had identified the anonymous buyers as “concerns ultimately controlled by Chinese state-owned enterprises”.

Pua, however, said that this was not the first time that the Straits Times had carried out stories which helped cover up some of "1MDB’s financial shenanigans", citing the sale of Bandar Malaysia to an Iskandar Waterfront-led consortium, which was abruptly terminated by the Finance Ministry.

A media maelstrom was created in May last year when the Straits Times reported that "government officials and financial executives close to the situation told The Straits Times that negotiations with the Dalian Wanda Group to take a central role as master developer have reached an advanced stage…", noted Pua.

"The above proved to be a hoax, of course, because when (Prime Minister) Najib Abdul Razak met Wanda a week later, he came home empty-handed without even a face-saving Memorandum of Understanding (MOU) signed."

The recent Straits Times report, Pua added, was similarly couched in the same language, citing the newspaper which claimed that “Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by 'concerns ultimately controlled by Chinese state-owned enterprises'".

"The report was inevitably picked up by nearly all local media outfits. This clearly served the interests of 1MDB which would want to avoid prickly questions on how they found the funds to repay IPIC," said Pua.

He, however, questioned the "absolute silence" from official sources if 1MDB had really succeeded in disposing of its properties in Pulau Indah and Penang to China-owned state enterprises.

"Najib and 1MDB would have been carrying out victory parades for proving their critics wrong, as they did in the past.

"Surely if the companies owning these parcels of land were sold for billions of ringgit to foreign investors, from China or otherwise, official transactions would have taken place and the information would be publicly available," added Pua.

He further noted how the parcels of land in Selangor and Penang were purchased by 1MDB for RM294 million and RM1.1 billion respectively.

Citing critics which claimed that both parcels were purchased at inflated prices, Pua, however, said that the combined purchase amounted to less than RM1.4 billion.

"Hence if the Straits Times report were to be true, then it begs the question as to which Chinese state-owned enterprises would pay an outrageous RM2.4 billion for these parcels, which in turn allowed 1MDB to repay its second loan instalment to IPIC?

"Or is it more likely that it is another hoax to evade disclosing the fact that it was really the Ministry of Finance, which directly or indirectly, repaid both instalments amounting to US$1.24 billion to IPIC?"

IPIC and 1MDB on Dec 27 last year announced that the latter had paid up all that is due to the former.

1MDB and its owner Ministry of Finance Incorporated (MOF Inc) had reached a settlement with IPIC earlier in April in which US$1.2 billion was to be paid to the latter in two equal tranches on July 31 and Dec 31.- Mkini