1MDB condemns WSJ report on ‘missing US$1bil’

(The Star) – 1Malaysia Development Bhd (1MDB) has refuted allegations in The Wall Street Journal (WST) report that the payment of “nearly US$1bil” (RM4.2bil) made to the International Petroleum Investment Co (IPIC) was unaccounted for.

It condemned the report as “wrong, poorly sourced, sensationalist and malicious”.

“We would have expected at the very least that the WSJ would have the decency and courage to name its source and/or provide proof.

“This inability to substantiate clearly shows the shallow nature of its assertions,” 1MDB said in a statement Friday.

The WSJ reported about a second missing money transfer from 1MDB to IPIC, an Abu Dhabi firm.

It reported that the “nearly US$1bil” paid to IPIC in 2014 for terminating certain financial options was undocumented.

The Malaysian fund said it could not speak on behalf of Aabar Investments PJS or IPIC nor can it comment on the accounting arrangements of third parties.

“What we can confirm is that the notes to the 1MDB 31.03.2014 audited financial statements clearly describe the source of funding and purpose of the payments for the option termination, which for the avoidance of doubt, is structured as a deposit pending determination of the final settlement amount (i.e. it is currently a financial asset belonging to, and not yet an expense to, 1MDB),” it said.

1MDB stated that it could confirm that pursuant to the payment made by it, the options were in fact terminated.

“In fact, 1MDB and its relevant subsidiaries were released and discharged from all agreements, options, covenants, conditions and stipulations on their part under the options and that any rights by any other party towards the options were relinquished and terminated,” it added.

Earlier this month, WSJ alleged that a payment of US$1.4bil in November 2014 from 1MDB to IPIC in return for a guarantee of a US$3.5bil bond issue was missing.

1MDB had refuted the claims, stating that the amount of US$1.4bil was accounted for in its 2014 accounts and certified by its auditors.