Is 1MDB recovering?
(Malaysia Impact) – Over the past few years, Pakatan leaders have spent their every waking moment trashing 1MDB. We’ve all heard their allegations: 1MDB is irredeemably in debt, it’s weighing down the economy, money is missing, global kleptocracy, bla bla bla. So, it must pain them to learn that, as recent events have shown, 1MDB is recovering quite nicely.
As you may have read, 1MDB just reached a settlement with Abu Dhabi sovereign wealth fund International Petroleum Investment Co. (or IPIC). IPIC was previously seeking legal action against 1MDB. The settlement will see 1MDB pay US$1.2 billion to IPIC, mainly by redeeming the former’s investment fund units Brazen Sky Ltd. and 1MDB Global Investment Ltd. (or GIL).
Now, this is extremely significant because both Brazen Sky and GIL are at the center of the corruption allegations we’re all familiar with. Brazen Sky funds were said to be siphoned by Riza Aziz and Jho Low. And money from GIL allegedly found its way to Najib’s personal bank account – the famous RM2.6 billion controversy.
But the 1MDB-IPIC settlement clearly demonstrates no misappropriation of funds ever took place. Brazen Sky and GIL retain their funds in full – how else could they be monetized to pay for the US$1.2 billion? It’s an unequivocal vindication of Najib and 1MDB, and a death blow to the silly ‘money is missing’ narrative that Pakatan has been obsessively pushing.
And then there’s the matter of the US$3.5 billion 1MDB paid to Aabar BVI, based on the belief that the latter was a subsidiary of IPIC. IPIC previously denied this, and claimed it didn’t receive those funds. Pakatan leaders have taken this to mean that 1MDB will have to make another taxpayer-funded payment of US$3.5 billion.
Nothing could be further from the truth. Here is a line taken from IPIC’s statement on the settlement: “The parties have also agreed to enter into good faith discussions in relation to payments made by the 1MDB group to certain entities.” This implies that 1MDB is very likely able to reclaim the US$3.5 billion it previously paid and use the money to clear its debt. In short, there will not be any ‘double payment’.
Sadly for Pakatan, 1MDB is steadily clearing all of its debts. In March, Najib said that 1MDB had fully repaid all its short-term debts and bank debts, totaling over RM3 billion, over the past two years. And the amicable settlement with IPIC signals that the 1MDB debt restructuring plan is close to the finish line.
