NAJIB’S 1MDB MID-EAST DIRT THE NEXT TO HIT THE FAN AFTER OVER-PRICED CHINA DEALS: MAHATHIR MAY RENEGE ON INTEREST PAYMENT, CHALLENGE VALIDITY OF OVERLY-GENEROUS SETTLEMENT WITH ABU DHABI – REPORT

PUTRAJAYA is relooking at a financial settlement package that the previous Najib administration had entered into with Abu Dhabi on matters related to 1Malaysia Development Bhd, reported The Sunday Times.

Quoting two senior Malaysian government officials who report directly to Dr Mahathir on 1MDB-related matters, the paper reported that Putrajaya is inclined to renege on the interest payment and challenge the validity of the financial settlement package.

The paper reported that government officials said Attorney-General Tommy Thomas is in the process of appointing lawyers in the United Kingdom to challenge the settlement agreement signed in London in April last year.

The paper said, however, that Putrajaya was facing problems in building a case.

“The lack of documentation and bringing together material from the previous investigations have been very difficult,” said one senior government official involved in the 1MDB legal campaign, adding that how Malaysia handles the Abu Dhabi exposure could prove crucial in its overall legal campaign against Najib for alleged national economic sabotage.

The paper said that the Pakatan Harapan government is set to face a milestone interest payment in mid-October .

It said the interest charge of US$50.3 million (RM209 million) represents the first financial commitment that the PH coalition government must honour over the 1MDB scandal since taking control of Putrajaya.

The paper said making the payment would amount to an explicit recognition on the part of Dr Mahathir Mohamad’s new administration that it recognises the liabilities and commitments it inherited from the previous government on all 1MDB-related matters.

This would set a dangerous precedent as other creditors would seize on this to make settlement demands.

However, failure to honour interest payment carries a separate set of financial risks.

It would not just trigger a default on the Abu Dhabi debt estimated at US$3.5 billion, but also crystallise cross-defaults on other 1MDB-related debt amounting to more than US$2 billion.

That in turn would rattle financial markets, put pressure on the local currency and undermine Malaysia’s credit-rating in international bond markets.

– https://www.themalaysianinsight.com