Why the silence on 1MDB debt repayment, asks Pua

DAP MP says if state fund had really made its final settlement to IPIC by disposing of properties in Selangor and Penang to China-owned entities, official transactions would have taken place.

PETALING JAYA: Petaling Jaya Utara MP Tony Pua today questioned reports that 1MDB had made its final settlement of US$602.7 million (RM2.4 billion) to International Petroleum Investment Co (IPIC) by divesting its stakes in two 1MDB-related entities that own tracts of land in Penang and Selangor.

He said if the companies which owned these parcels of land were indeed sold for billions of ringgit to foreign investors, official transactions would have taken place with the information made publicly available.

“The question is, if 1MDB has really succeeded in disposing of its controversial properties in Pulau Indah and Penang to China-owned state enterprises, why is there absolute silence from official sources?

“Najib Razak and 1MDB would have been carrying out victory parades for proving their critics wrong, as they did in the past,” he said in a statement.

On Dec 27, Abu Dhabi’s government-owned IPIC said 1MDB had made all required payments as part of a settlement agreement between the two.

1MDB was required to pay IPIC about US$600 million by Dec 31, as part of a settlement agreement reached in April after 1MDB defaulted on its bonds, causing the Abu Dhabi company to ask a London court to arbitrate over a claim totalling some US$6.5 billion.

1MDB had originally agreed to pay US$1.2 billion in two instalments to IPIC, with the first of about US$600 million due by July 31.

1MDB, however, missed the deadline due to the need to get “regulatory approvals” and made the payment in August instead.

According to The Straits Times, 1MDB made the second payment by divesting its stake in two companies that owned tracts of land in Penang and around Port Klang to buyers linked to Chinese state-owned enterprises.

The Singapore daily quoted a source which said the equity interests in the 1MDB real estate entities were acquired by “concerns ultimately controlled by Chinese state-owned enterprises”.

Pua said the report had served 1MDB’s interests as the state fund would have wanted to avoid “prickly questions” on how it found the funds to repay IPIC.

He added that the parcels of land in Selangor and Penang had been purchased by 1MDB for RM294 million and RM1.1 billion respectively, which critics had called inflated prices.

“However, even so, the combined purchase amounted to less than RM1.4 billion.

“Hence, if the SST report were to be true, 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,” he said.

“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?” -FMT