1MDB bailout is the largest ever, says Guan Eng
Finance Minister Lim Guan Eng contends that 1MDB had incurred the largest-ever government bailout.
(FMT) – The Finance Minister, Lim Guan Eng, has poured scorn on former prime minister Najib Razak’s denial that 1MDB was bailed out, arguing there could be no other description for payments by Putrajaya on behalf of the troubled state investment arm.
Najib had argued that 1MDB had transferred all its real estate assets including Tun Razak Exchange and Bandar Malaysia to the Minister of Finance Incorporated as recommended by the Public Accounts Committee.
He had claimed these payments should be rightly construed as “compensation” to 1MDB.
But Lim said that Najib “could not be more wrong”, on five grounds:
1. The transfer of these assets back to the MoF in April 2017 was not a “sale and purchase” transaction, with ministry officials confirming that no such S&P agreement was executed.
2. The lands were originally sold by the Government to 1MDB at bargain basement prices between 2010 and 2012.
3. The MoF did not take over these entities “for free”, with a RM800 million loan from Socso attached to TRX City Sdn Bhd and a RM2.4 billion sukuk bond for Bandar Malaysia Sdn Bhd.
4. The MoF had already made additional payments to, or on behalf of 1MDB with regards to the above projects.
5. The RM6.98 billion paid by MoF on behalf of 1MDB were in relation to borrowings completely unrelated to the above real estate projects, with payments instead made for servicing the coupon interest of bonds.
“Hence, given all of the above facts and figures, there could be no other description for the RM6.98 billion worth of payments by MoF on behalf of 1MDB to date, other than to describe it as the single largest bailout in history carried out by the government of Malaysia,” Lim said in a statement.
Yesterday, Najib had denied that the Treasury, Bank Negara Malaysia and Khazanah Nasional Bhd had to “bail out” 1MDB’s debts as claimed by Lim.
Najib, who was previously finance minister, said this was misleading and a politically-motivated attempt to obscure the facts and urged Lim to be transparent and to tell the full story.
