(Apr 1): Putrajaya-owned SRC International has recorded an investment impairment of RM115 million, PKR said today, drawing concerns on its ability to pay back the RM4 billion loan from Retirement Fund Incorporated (KWAP).

PKR's Rafizi Ramli said that the declining value of SRC's assets also brought into question the authenticity of its investments, noting that the impairment could even be higher as there was no information on some RM3.1 billion of its investments.

"This is real and big. I wouldn't be surprised if SRC continues to record investment impairments in the years to come when the unknown investments fail to generate income for SRC," he said at a press conference at the Parliament lobby today.

Rafizi said according to financial audit regulations, an organisation's management would come up with the latest evaluation on its investments by comparing the investment value with the earning potential of the investment in the future.

"If the investment value is lower than the earning potential, the company's management would have to make an impairment on the investment value," he said.

He added that the management of public funds through SRC was even more sensitive than the loans taken by debt-ridden 1Malaysia Development Berhad (1MDB) as it involved pensioners' funds.

"1MDB has collected some RM42 billion in debts but it is in the form of bonds. However, SRC has borrowed from the pension fund. The impairment will affect the government's ability to pay the pensioner's fund.

"What more when the federal government had, this week, applied to have an additional budget, a part of which would be channelled to KWAP," the PKR secretary-general said.

Last week, Rafizi revealed that SRC had invested some RM3.81 billion of the RM4 billion borrowed from KWAP in "open-ended" funds that cannot be identified nor classified.

He said this was similar to the investments made by 1MDB, adding that out of that amount, some RM3.1 billion has been put into funds that cannot be traced by auditors of SRC's finances.

Rafizi urged Najib to order SRC to return the RM4 billion it borrowed from KWAP to protect the interests of civil servants.

He said that SRC, a company that was "de-merged" from 1MDB three years ago, had made losses of RM164 million without any gains, according to its latest financial statement.

He added that SRC's situation was akin to the modus operandi of other organisations that are linked with 1MDB, which was to borrow huge amount of funds with a guarantee from the government without stable business activities.

1MDB has come under fire from Rafizi and other opposition politicians as well as former prime minister Tun Dr Mahathir Mohamad over the fund's heavy debts, its use of money and its opaque operations.

There were concerns over the firm’s debts estimated at some RM42 billion, just five years into its operations, amid softening of the ringgit against the US dollar. – The Malaysian Insider