Auditor-general raises concerns over 5 finance ministry-linked companies

(FMT) – The auditor-general has raised concerns over the capability of five companies owned by the finance ministry to repay loans given to them totalling RM76.1 billion.

Elaborating on the Auditor-General’s Report 2018 (Federal Government’s Financial Statements) today, Nik Azman Nik Abdul Majid said the federal government only paid RM2.8 billion of their debt in 2018.

He said the previous government, which provided guarantees for the loans, repaid RM1.7 billion, and the present Pakatan Harapan repaid RM1.1 billion.

He named the Ministry of Finance Incorporated companies as Syarikat KL International Airport Bhd, GovCo Holdings Bhd, Asset Global Network Sdn Bhd, Jambatan Kedua Sdn Bhd and Dana Infra National Bhd.

Nik Azman said the report outlined six recommendations for the government, including the tightening of criteria to set up Special Purpose Vehicle (SPV) companies.

“They should establish a policy to set a ceiling on government guarantees,” he told a press conference at Parliament House.

“They should firstly look at the financial ability of the government itself. Then, they should look at the company’s capacity to pay back the government.

“Finally, they should look at the projects being undertaken by the SPVs, whether they can produce economic activities and income to pay back their debts.”

Nik Azman also said the financial statements reflected the reality of the country’s financial situation.

Public Accounts Committee (PAC) chairman Noraini Ahmad, who was present at the press conference, also said the committee was concerned that there was no ceiling on government guarantees.

Noraini highlighted the fact that the federal government debt in 2018 stood at RM741 billion, a 7.9% increase from RM686.8 billion in 2017.

According to the auditor-general’s report, she said, there were new government borrowings totalling RM131.6 billion in 2018 – 53% by BN and the remainder by PH.

She said 59% of the borrowings were used to pay back part of the debts.