Wednesday, May 25, 2016
1MDB not allowed to borrow any more
Speaking in Parliament, Johari said the troubled state fund won't be allowed to borrow from even public funds such as the Employees Provident Fund (EPF), Retirement Fund Inc (KWAP) and Pilgrimage Fund Board (Tabung Haji).
Johari's statement prompted Amanah lawmaker Khalid Samad to comment, "Who will give more loans to them? The answer by the minister is unacceptable."
Johari said 1MDB will be dissolved once its debts are settled, and that the fund is currently carrying out its rationalisation plan to divest its assets to pay off the debt.
The fund has accumulated debts totalling RM50 billion as at January, compared to its asset value of RM53 billion.
Speaking to reporters later, Johari said the transfer of assets by the Minister of Finance Inc (MoF Inc) is expected to be completed by the end of this month or middle of next month.
After that, the company would be in "runoff" and then dissolved after all debts are paid off.
"We cannot straight way close 1MDB, it will be a run-off because of the liabilities," he said.
"There is no more 1MDB after (the debts are paid off). Some of them (the staff) have already been terminated. They are already doing (retrenchment) slowly," he said.
Asked if MoF Inc plans to assume the debts to dissolve 1MDB earlier, Johari did not provide a direct answer, merely saying that the government will stand on the RM5 billion sukuk it guaranteed.
"1MDB debts, you have RM5 billion sukuk guaranteed by the government, whatever it is we try to match the future revenue. A guarantee is a guarantee. If anything happens, the government has to stand on the guarantee; that is our sovereignty's credibility, we have to protect that.
"If you make mistake doesn't mean you have to destroy the country. We take note of the mistake and make sure it doesn't recur. We cannot allow the country's sovereignty to get affected," he added.
On whether the bond would also be transferred to MoF Inc together with the asset, Johari replied, "The bond cannot be transferred as it is issued under 1MDB. We cannot talk to bond holder and transfer. That's why we have run-off.
"We keep the bond and hopefully the future asset will be able to cover," he added.
Finance Minister Datuk Seri Najib Razak has said that the government is not obligated to take over the US$3.5 billion (RM14.33 billion) bonds issued by 1MDB's subsidiary. The bonds were co-guaranteed by 1MDB and International Petroleum Investment Co (IPIC) and are currently under dispute.
On BSI Bank's closure in Singapore, Johari cited 1MDB's statement yesterday which said there was no impact to any assets of 1MDB.
"BSI has stopped operation, (this) means they cannot continue do any banking activities and whatever assets they have for the clients does not belong to them. It belongs to the clients," he said.
On claims that 1MDB is the cause for the closure, Johari said, "We don't have much dealings with BSI anyway. BSI is a bank that also has problems with other country's sovereign fund, so it is not just 1MDB."
By Chen Shaua Fui / theedgemarkets
Posted by wikisabah at 4:52:00 PM