This article first appeared in The Edge Financial Daily on December 28, 2017

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) has remitted to International Petroleum Investment Co PJSC (IPIC), in full, the amount that the controversial strategic investment fund is required to pay by Dec 31, 2017.

In a statement yesterday, 1MDB said “all funds were paid from proceeds of the ongoing rationalisation programme”. However, the statement did not reveal details of the ongoing rationalisation programme, whether it concerns assets or investment units, for instance, that the fund sold to raise cash for payment.

1MDB’s statement was issued after IPIC’s announcement made to the London Stock Exchange yesterday.

IPIC said: “Further to the announcement on Aug 30, 2017, IPIC has now received all the funds required to be paid to IPIC by Dec 31, 2017 under the settlement with the Minister of Finance (Inc) Malaysia and 1MDB and the Consent Award made on May 9, 2017.”

To recap, 1MDB had agreed to pay IPIC US$1.2 billion as part of the settlement agreement that the two parties reached in April.

Under the settlement agreement, 1MDB has agreed to pay back US$1.2 billion to IPIC for a US$1 billion loan plus US$200 million in interest payment. IPIC, the guarantor of the US$3.5 billion bond issued by 1MDB, had made the payment on behalf of 1MDB in 2015.

The amount was supposed to be paid in two instalments on July 31 and Dec 31.

1MDB had missed the first payment deadline on July 31 due to the need to get regulatory approvals and IPIC had granted 1MDB a one-month extension until Aug 31. The strategic fund managed to meet the extended deadline.

However, the latest payment does not signify closure of the dispute between 1MDB and IPIC.

1MDB has yet to come out with a resolution to recover the missing US$3.5 billion which it claimed it had deposited into IPIC’s subsidiary Aabar BVI but the Abu Dhabi firm denied receiving such money. 1MDB said it is in talks with IPIC on the matter.