Cabinet rejects RM3 billion for 1MDB as debt repayment options narrow

By admin-s On Feb 27, 2015

(TMI) – The Cabinet has rejected a proposed RM3 billion cash injection for the debt-laden 1Malaysia Development Bhd (1MDB), narrowing the financing options for the strategic investor to repay its debts on time.

The Malaysian Insider understands a majority of ministers at this week’s Cabinet meeting on Wednesday did not approve the minutes of the previous week’s meeting for the amount.

“The Cabinet rejected the proposed RM3 billion cash injection for 1MDB,” a source told The Malaysian Insider in Kuala Lumpur last night.

Other sources confirmed the Cabinet rejection, which is seen as a blow to the wholly-owned government company that was set up in 2009 to invest in key economic sectors under Prime Minister Datuk Seri Najib Razak’s rule.

“Options are narrowing for MoF as 1MDB cannot raise its own funds right now. It basically needs money from its only shareholder, the government,” said another source.

Najib, who is also the finance minister, heads the advisory board of 1MDB, which has ventured into two huge property developments in Kuala Lumpur and owns 15 power and water plants across Asia.