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Khazanah and BNM money used to pay 1MDB debts
Published on: Friday, May 25, 2018

Putra Jaya: The Finance Ministry confirmed several news reports published on the Wall Street Journal and Reuters claiming it had made payments on behalf of 1Malaysia Development Berhad (1MDB) to service the latter's debt obligations.

Minister Lim Guan Eng cited a press release issued on May 22, saying the ministry had made payments amounting to RM6,975.14 million which included the payment made to Abu Dhabi's International Petroleum Investment Company (IPIC) as part of the RM5.05 billion settlement agreement.

"The sources for the payments included redemption of Redeemable Cumulative Convertible Preference Shares (RCCPS) by Khazanah Nasional Bhd amounting to RM1.199 billion and the sale of a piece of land to Bank Negara Malaysia (BNM) amounting to RM2.066 billion," he said in a press conference.

Lim said the ministry through its indirectly wholly owned company Hartanah Mampan Sdn Bhd had entered into a Sales and Purchase Agreement (SPA) with BNM to sell the land with the address of Lot 41, Seksyen 51 that is located next to Sasana Kijang in the city centre.

A report published by the Wall Street Journal claimed 1MDB was in financial distress late last year and lacked the cash flow needed to pay the sum owed to IPIC.

It added the funds that 1MDB claimed originated from its sale of power plants as part of its "rationalisation programme" had come instead from BNM through a land deal.

The report also showed 1MDB still needs over RM1.5 billion annually until 2024 just to service the debt as revealed in the declassified Auditor General's audit of 1MDB, which showed the firm required more than RM42 billion to clear its liabilities.

Yesterday, Lim also dubbed 1MDB CEO Arul Kanda Kandasamy "utterly dishonest and untrustworthy" after the latter claimed to have no idea about the condition of the firm's finances or whether the billions of ringgit in "units" even existed, despite previously insisting that they did and were redeemed as mentioned in a series of roadshows prior to GE14.

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