Wednesday, June 26

RM42 billion needed to settle 1MDB loans up to 2039 – Audit Report


Traffic passes a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia, July 6, 2015.  – Reuters file photo

KUCHING: The 1Malaysia Development Bhd (1MDB) will require an estimated RM42 billion to settle its principal cost and interest for loans maturing between November 2015 and May 2039.

According to the National Audit Department’s declassified report released yesterday, 1MDB would need a huge amount of money to undertake its payment commitment of RM4.88 billion in 2016, RM14.74 billion in 2023, and RM5.14 billion on 2039.

This was based on assumptions that 1MDB’s rationalisation plan would be implemented immediately and that no new loans are taken after October 2015.

“1MDB would also require at least RM1.52 billion per year from November 2015 to May 2024 to settle its loans,” the report said.

As of Oct 31, 2015, 1MDB’s outstanding loans and financing totalled up to RM55 billion with assets amounting to RM58.6 billion. A sum of RM20.31 billion of the loans and financing had received federal government guarantees and assistance.

The report noted that 1MDB’s issued share capital was only RM1 million during the 2010-2014 period.

Such a small share capital indicates 1MDB’s instability, as the fund is forced to borrow in order to finance its activities, noted the report.

Former Prime Minister Datuk Seri Najib Tun Razak had consistently denied any wrongdoing in connection with alleged graft surrounding 1MDB, insisting that RM2.6 billion of funds deposited in his personal bank account were a donation from a Saudi royal.

Today, at least six countries, including the United States and Switzerland, are investigating claims that US$4.5 billion (around RM17.83 billion) was allegedly siphoned off from 1MDB.

1MDB is a strategic development company formed in 2008, wholly owned by the Minister of Finance. It is currently funding large development projects such as the Tun Razak Exchange and the Bandar Malaysia project.

1MDB currently owns 16 power and desalination plants in six countries.