No bailout to solve 1MDB woes, DPM says


(Reuters) – Putrajaya will not use taxpayers money to save debt-laden 1 Malaysia Development Berhad (1MDB) from its financial troubles, Tan Sri Muhyiddin Yassin said today.

In a statement here, the deputy prime minister lauded Prime Minister Datuk Seri Najib Razak’s call for an independent audit of 1MDB’s accounts and told the strategic investment firm to view all allegations of impropriety against it seriously.

He said during the audit, 1MDB’s board of directors must explain the firm’s non-profitable business ventures, noting that some deals have not brought long-term benefit to both the company and the government.

“The government will also stand to lose out if the restructuring of 1MDB involves selling its land assets for the TRX (Tun Razak Exchange) and Bandar Razak (property projects), which were acquired from the government at low rates, and the sale returns are used to settle the company’s (1MDB) debts,” Muhyiddin said.

“I would like to stress that whatever effort is taken to solve the 1MDB issue, it should not involve any bailout for the firm that involves public monies,” he said.

Citing sources yesterday, Reuters reported that 1MDB will be dismantled and possibly dissolved as part of a debt repayment plan which involves an impending sale of most of its assets.

Among others, the news wire reported that the firm is expected sell its land assets and stakes in the TRX and Bandar Malaysia high-profile property projects.

On Wednesday, Najib ordered the Auditor General to conduct an independent check on 1MDB’s accounts and prepare a report for the PAC to further examine.

The state-owned firm has also said that it will comply with the audit.

1MDB came under criticism after a British paper, The Sunday Times in collaboration with whistleblower site Sarawak Report, ran an exposé last Sunday claiming of impropriety in 1MDB’s venture with oil exploration and production firm PetroSaudi International.

Petrosaudi has since denied the allegations.

Muhyiddin today urged the Auditor General to monitor 1MDB’s accounts closely and from the beginning, since the strategic investment firm was founded.

“This is because the allegations against it touch on deals that were made since 2009, and which were not included in its 2013 financial statement that was audited by Deloitte,” the deputy prime minister pointed out.

He noted that the Petrosaudi deal was among those mentioned in the accusations of impropriety against 1MDB.

“1MDB must take seriously all the allegations it faces, especially in social media,” Muhyiddin said today.

He told the firm to be prepared to sue or be sued, should the allegations against it be proven true or false.