Thursday, December 28, 2017
Report: Chinese firms came to 1MDB's rescue
The report, citing sources, said 1MDB sold financial instruments and stakes by two 1MDB-related entities which held land in northern Penang and around Port Klang.
"Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by 'concerns ultimately controlled by Chinese state-owned enterprises'.
"The executive declined to elaborate," read the report. Malaysiakini is unable to independently verify such claims.
1MDB claim to have acquired 234 acres of land in prime land in Ayer Itam, Penang for RM1.38 billion in 2013.
The Penang government disputed this claim, following checks with the Land and Mines Office.
Over in Selangor, 1MDB acquired a 310-acre piece of land near in Pulau Indah near the Port Klang Free Zone in 2014.
Previously, 1MDB had cited elaborate plans to develop the two parcels of land, but the plans fell apart after the company faced massive cash flow problems.
China's interest in 1MDB assets comes as no surprise. As far back as a year ago, Financial Times had already reported that China and Malaysia were in talks to rescue 1MDB.
China already has a substantial stake in 1MDB-linked asset Edra Global Energy and is eyeing projects in the formerly 1MDB-owned Bandar Malaysia.
1MDB is a sovereign wealth fund established in 2009, soon after Najib Abdul Razak's ascension to the premiership.
Up until the conclusion of a Public Accounts Committee (PAC) inquiry last year, the company's constitution stated that the prime minister, as its advisor, had some executive powers over the company.
Around the time of the land deals, IPIC became involved with 1MDB through a series of loans and stood guarantor for some bonds.
Earlier this year, IPIC and 1MDB avoided an arbitration process and reached a settlement involving attempts to recover US$6.5 billion (RM26.5 billion) from the Malaysian company.
The settlement required 1MDB to repay approximately US$1.2 billion (RM5 billion) in two equal installments on July 31 and Dec 31.
The first tranche was paid about a month late while the second tranche was paid up yesterday.
According to Straits Times, a government official said that the payment was made ahead of the deadline due to the year-end holidays.
"The process to pay is being initiated early because the funds are in place and 1MDB wants to avoid any administrative trip-ups that could result from the banking holidays at the end of the year," read the report.
1MDB has never released details of how the debt-laden company managed to cough up the funds to repay IPIC.
"All funds were paid from proceeds of the ongoing rationalisation programme," the firm said in a concise statement yesterday.
Although the US$1.2 billion debt has been repaid, 1MDB's problems with IPIC are unlikely to end here.
IPIC told the London Stock Exchange in April that both 1MDB and its owners had agreed, as part of the settlement, to enter into "good faith discussions in relation to payments made by 1MDB Group to certain entities."
It is uncertain what these "certain entities" are, although it is possible that this may refer to the Aabar BVI firm, which IPIC said it has no links with. - Mkini
Posted by wikisabah at 8:20:00 PM