‘We could do without 1MDB’, says Dr M

(Malay Mail Online) – Former prime minister Tun Dr Mahathir Mohamad refuted the need for Malaysia to set up 1Malaysia Development Bhd (1MDB) today, in another salvo against the Putrajaya-owned fund.

According to Dr Mahathir, 1MDB had only served to increase the country’s debt, and had suffered such huge losses that would be detrimental to the country.

“1MDB is said to be a sovereign wealth fund, but it is not. It is money that we have borrowed. When we borrow, we have to pay back. This is not wealth.

“In my opinion, even if there is no 1MDB it would be fine,” Dr Mahathir told reporters here, after he was asked if the fund should be closed.

Criticisms against 1MDB was renewed after a daily reported last week that it booked a net loss of RM665.36 million in its previous financial year, citing a filing with the Companies Commission of Malaysia (CCM).

According to a report by The Star daily, 1MDB’s filing showed a loss before tax of RM668.55 million against reported revenues of RM4.258 billion.

The filing was made after the sovereign wealth fund closed its books yesterday, some seven months after the end of its financial year in March 31, 2014.

The loss was lower, however, than that registered in its previous financial year, when it splashed RM778.243 million worth of red ink on its accounts.

According to 1MDB, its non-current assets now stood at RM31.879 billion, while current assets were at RM19.529 billion. It continues to hold a total of RM48.5 billion in both non-current and current liabilities.

In September, Dr Mahathir had questioned why Malaysia needed a state investment fund such as the 1MDB, pointing out that these were usually formed by countries with a surfeit of wealth and revenue, rather than one heavily in debt.

The fund has been dogged by negative publicity over massive fees paid for bond sales, the near one-year delay in publishing its financial accounts, and most recently, changing auditors.

1MDB, a brainchild of Prime Minister Datuk Seri Najib Razak, was set up to help drive Putrajaya’s strategic investments.