Umno MP slams 1MDB for ‘elegant silence’ on status of RM3.6 billion loan

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(May 13): An Umno federal lawmaker has hit out at 1Malaysia Development Berhad (1MDB) for its "elegant silence" pertaining to the status of its US$975 million (RM3.6 billion) loan from a consortium of six foreign banks.

Kepala Batas MP Reezal Merican Naina Merican said it is irresponsible of the state investment firm to remain silent on its financial status, pointing out that it will further affect its image.

"I am urging 1MDB management to answer the issue that has been reported by the media. It is not the time now for 1MDB to remain silent. There is no elegant silence in issues such as this.

"The ability of 1MDB to come forward to give a rationale and report on its current financial position will help the people to make a sound judgement on a hotly-debated issue.

"Personally, I feel 1MDB's management failure to come out to give an explanation is very irresponsible," he said in a statement today.

Singapore's Business Times reported today that the six "jittery lenders" have turned "panicky" because the loan was secured by 1MDB's wholly-owned Brazen Sky's US$1.103 billion – money which is currently being parked at Swiss-based BSI Bank Singapore.

The business daily, in quoting sources, said "securitisation document" for the loan was now deemed "incomplete", as one of the covenants was not fulfilled.

These meant lenders could demand for repayment from the state investment vehicle any time before its due date of end-August.

"What was earlier construed as a tightly collateralised loan is now making the banks nervous, given this controversy," the daily quoted an unnamed source as saying.

Yesterday, PKR lawmaker Pandan MP Rafizi Ramli had also revealed he had received information that the troubled state investment vehicle had listed its “questionable” account in BSI Bank Singapore as collateral.

He said if this was true, 1MDB may have to resort to using public funds to meet the September payment deadline, since its account in BSI Bank reportedly had no actual cash.

On April 22, whistle-blower Sarawak Report said 1MDB’s account in BSI Bank merely contained “paper assets”, the “true value of which cannot be determined”.

“A loan as big as this would most definitely have collateral. The information I received is that the collateral for this loan is the funds in the BSI Singapore account, which was reported as being non-existent,” he had said. – The Malaysian Insider