Former PM says contrary to claims by Finance Minister Lim Guan Eng, 1MDB’s debt or liabilities remained in the company while its assets were transferred to MOF Inc.
PETALING JAYA: Former prime minister Najib Razak has refuted Finance Minister Lim Guan Eng’s allegation that the ministry, Bank Negara Malaysia and Khazanah Nasional Bhd had to “bail out” 1MDB’s debts.
Najib, who was previously finance minister, said this was misleading and a politically-motivated attempt to obscure the facts.
He said Lim needed to be transparent and to tell the full story and not just “half a story”.
He said all of 1MDB’s valuable and strategic real estate assets had been transferred to other companies owned by MOF Inc, in accordance with the recommendations of the Public Accounts Committee’s (PAC) report on 1MDB.
“Over time, these prime real estate assets can be worth up to more than RM30 billion,” he said in a statement posted on Facebook today.
He said although MOF Inc had taken over the assets, 1MDB’s debt or liabilities remained in the company.
“Accordingly, the arrangement, as I can confirm, is for MOF Inc to service 1MDB debts, but in return for taking over the assets,” he said
“Put another way, had those assets remained in 1MDB, it could have developed and sold the assets on its own, and used the proceeds to pay its debt.
“To fulfil its obligations, MOF can use various methods, including sale of land (eg to Bank Negara Malaysia) or by collecting debt repayments (eg from Khazanah),” he added.
Najib said there was nothing wrong with such transactions, as each was approved in line with relevant governance frameworks, while being conducted on an “arm’s length” basis and following correct laws and procedures.
On May 22, Lim had claimed that the finance ministry had paid some RM6.98 billion to bail out 1MDB by helping it service its debts since April 2017.
He alleged that the previous government had “conducted an exercise of deception” over 1MDB and misrepresented the financial situation in Parliament.
Najib said the question of the ministry or Bank Negara Malaysia (BNM) or Khazanah bailing out 1MDB did not arise.
“It is in fact downright misleading to make such allegations. MOF Inc took over assets and it must be responsible for the liabilities – that is the only correct way, legally and accounting-wise.
He said it was therefore wrong of Lim to only highlight the debts of 1MDB, adding that he must also inform the public about 1MDB assets that had been taken over.
“The minister of finance must ‘walk the talk’ on CAT,” he said, referring to the “Competency, Accountability, Transparency” slogan that Lim had introduced in Penang when he was chief minister there from 2008 to this year.
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