1MDB should make quick business decisions, says Khairy

Khairy Jamaluddin says the fundamentals of 1MDB, in terms of the assets it has, are still good enough to can cover its liabilities.

(The Rakyat Post) – 1Malaysia Development Bhd (1MDB) must monetise its assets quickly to service and pare down its debts, said Youth and Sports Minister Khairy Jamaluddin.

Khairy said 1MDB was a highly geared company which needed to lower its gear,

“It needs to pay off some of its debts. It has assets, like the power assets that is subject to the initial public offering (IPO) which 1MDB is planning some time this year.

“Once that IPO succeeds, of course it will have some cash to pare down its debt level,” he told reporters today in New York where the Umno Youth chief is on a working visit to the United States.

He added that 1MDB would need to start quickly in passing up some of the land at the Tun Razak Exchange (TRX) and also in Sungai Besi in Kuala Lumpur so that money could come in from the assets, and that these were also the Cabinet’s concerns.

Khairy said he was not concerned that the assets or the liabilities would become a black hole into which not just 1MDB but Malaysian banks would fall into, but there was a need to push the 1MDB management to ensure that there were quick business decisions taken to monetise its assets.

This, he said, was in order for 1MDB to have the money to fulfil its debt obligations and that these were the concerns of the Cabinet.

“They need a sound cash flow to pay off the interest on the loans and loans themselves, so they need to start paying and get their projects off the ground quickly.

“The bottom line is, the fundamentals of the company in terms of the assets it has are still good enough and can cover its liabilities,” he said.

On allegations by a whistleblower website that PetroSaudi Investments Limited siphoned billions out of 1MDB in a joint venture project, he said the money had been returned to 1MDB when it exited its partnership with the former.

He pointed out that this had been audited by Deloitte, one of the biggest accounting firms in the world.

“So what more can we ask for when present audited accounts are proof and evidence?

“I’m not saying we should not take allegations seriously, as ministers are duty bound to ensure that 1MDB does not pose a systemic risk to the economy.

“At the Cabinet, we continue to ask probing questions about 1MDB to ensure that these allegations are not true,” he said.