Cash, then assets, 1MDB funds in Singapore now in ‘units’

Husni Hanadzlah

(The Star) – 1Malaysia Development Berhad (1MDB) is experiencing “short term” cashflow problem with the ability to pay its debts, said Finance Minister II Datuk Seri Husni Hanadzlah.

He assured that the Government would find a solution for the debt-laden government investment arm.

“The problem is a short term cashflow problem, that is all.

“We will settle it. In terms of asset quality, they have the assets to pay all. It is only a short term cashflow problem,” he told reporters at Parliament lobby, Thursday.

Husni said 1MDB might have misinterpreted the investment of US$1.103bil (RM4bil) in BSI Bank (Singapore) Ltd.

“There’s a mistake. They (1MDB) had the impression that there was cash when they redeemed the funds. Actually, that is a saving,” said Husni.

Husni was commenting on contradicting Dewan Rakyat written replies by the ministry to DAP lawmaker Tony Pua, who queried whether 1MDB still had the cash in the Singapore bank.

In January, the Finance Ministry said 1MDB had deposited the funds it redeemed from its offshore account in the Cayman Islands into BSI Bank, with the amount held in US dollars.

On March 10, it confirmed in a written reply to Pua that the funds were held in the Singapore bank in the form of cash.

On May 19, however, the Government said the funds were not in the form of cash, but assets.

When asked, Husni did not elaborate on the form of assets the company had, but stressed that the saving was in the form of “units.”

“Units, just units,” he said, refusing to explain the nature of units when pressed further.

Husni said the units were backed by sovereign wealth funds and the Government hoped they could repatriate the funds as soon as possible.

He also assured that the company would not head for a default.

“A default will cause systemic effect and we do not want that,” he said.

He said he was in the midst of completing a report on 1MDB’s restructuring plan for the Cabinet next week.

“We have had discussions (with 1MDB) and their position is very clear. We have our plans there and it’s very concrete,” he said.