1MDB denies US$1.4b missing, says records show payments made
(Malay Mail Online) – 1Malaysia Development Berhad (1MDB) today denied a report that US$1.4 billion (RM6.03 billion) in remittance to a United Arab Emirates (UAE) state investment vehicle had gone missing, insisting that its records show the payments were made.
The Malaysian government-owned investment firm said its audited financial statements “clearly describe the amount and purpose of the payments”, which it said were structured as a deposit or financial asset belonging to 1MDB and not as an expense to the company.
“Secondly, based on those payments, we can confirm that IPIC did provide and continues to provide, guarantees for the principal and interest of 2 x US$1.75 billion bonds issued by 1MDB, with a total principal and interest amount of approximately US$5.5 billion,” it said in a statement.
“Thirdly, we can confirm that 1MDB auditors, Deloitte, made specific and detailed enquiries on these payments prior to signing off on the 1MDB audited accounts,” the firm added.
Earlier today, the Wall Street Journal (WSJ) ran a report claiming that the UAE has raised questions on the US$1.4 billion payment, which allegedly never reached the country’s state investment fund International Petroleum Investment Co (IPIC).
According to the US-based newspaper, IPIC had guaranteed the US$3.5 billion bond issued by 1MDB to fund its purchase of power plant assets back in 2012.
The deal gave IPIC the option to buy a 49 per cent share in the power plants, besides receiving collateral for the bond, the WSJ said.
While the 1MDB financial statements said that it paid US$1.4 billion as collateral, the WSJ said the Auditor-General’s draft report on 1MDB said this sum went to IPIC’s subsidiary Aabar Investments PJS.
But IPIC’s consolidated financial statements do not mention receiving the US$1.4 billion, with two sources familiar with the issue claiming that both IPIC and Aabar did not receive the amount, WSJ said.
1MDB today stressed that the fact that WSJ cited in its report “transcripts of the proceedings” of a Malaysian parliamentary committee investigating the firm raises concerns that due process is being undermined, as the Public Accounts Committee (PAC) is the only parliamentary panel probing the company’s finances.
The firm argued that parliamentary Standing Orders clearly state that any information presented before a parliamentary committee cannot be published until after it presents its report to the Dewan Rakyat.
“The actions by Wall Street Journal are a potential breach of Malaysian law by a supposedly respectable foreign publication. We are further concerned as to who involved in the PAC hearings may have leaked this transcript, which is clearly an attempt to prejudice the PAC investigations and deny 1MDB its right to due process as provided for by the laws of Malaysia.
“1MDB strongly urges the relevant authorities to investigate this matter thoroughly and take all requisite action to preserve the process integrity and Standing Orders of the Malaysian Parliament,” the firm said.
