1MDB didn’t use government funds, able to clear debt, deputy prime minister says

(Malay Mail Online) – 1Malaysia Development Berhad (1MDB) has never used any funds from the government for its deals and is also fully capable of repaying all its debts, Datuk Seri Ahmad Zahid Hamidi said.

In an interview with Malay daily Berita Harian published today, the newly-appointed deputy prime minister explained from the perspective of a person “involved in the banking sector” that 1MDB has plenty of assets which enables it to remain solvent despite having loans from various banks.

“I’m confident that if forensic accounting is conducted, it will reveal their ability to make repayments based on the assets that are in 1MDB.

“1MDB didn’t use the government’s money or allocations. A lot of the deals are between lender and borrower, so in this case, here will definitely be repayments and a payment schedule must be made,” Zahid was quoted as saying.

He added that 1MDB was still “bankable” but the issues surrounding the state-owned company rose out of the public’s lack of understanding about the company and its assets.

“The question is not everyone understands this issue. We must use layman language because of that we’re caught in the opposition parties’ games.

“Actually we are in a situation where we also don’t understand and people are manipulating this issue. Although there are people explaining the issue, they also don’t understand it,” he pointed out.

He noted that the company had already paid up its RM1 million capital and that the remaining debts are from bank loans, which have no connection to the government.

1MDB was incorporated in 2009, after Prime Minister Datuk Seri Najib Razak announced the decision to turn the Terengganu Investment Authority state fund into a federal agency.

Since then, 1MDB has been dogged by negative publicity over its finances and reported RM42 billion debt that it amassed in the years since its inception.

The 1MDB mess has triggered calls for Najib to step down ahead of his term, a campaign that influential former prime minister Tun Dr Mahathir Mohamad has been zealously leading.

Last month, US daily Wall Street Journal reported nearly US$700 million (RM2.6 billion) was funnelled through 1MDB and into bank accounts purportedly owned by Najib ahead of the 2013 May general elections.

Najib has yet to deny or confirm the allegation.