KUALA LUMPUR: While the Malaysian public is puzzled over the contradicting statements made by Prime Minister Datuk Seri Najib Razak on 1Malaysia Development Bhd’s (1MDB) US$1.103 billion (RM3.98 billion) investment redemption in Singapore’s BSI Bank Ltd, Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah has tried to clear the air, saying the fund has redeemed its investment in the Cayman Islands for assets, not cash.

“I feel it was a mistake, a mistake in the nature that it was interpreted (as cash) when 1MDB said that it had redeemed (US$1.1 billion from the Cayman Islands) and kept it in a bank in Singapore,” Ahmad Husni told reporters at the Parliament lobby yesterday.

The minister explained that it was “assets” and not cash that was redeemed from the Cayman Islands.

“It is actually savings (in the form of units) ... that is [a] unit that is being backed by the sovereign wealth fund,” said the minister.

However, when asked if the “units” were in the form of debt paper or sukuk, Ahmad Husni could not explain further except for repeating that it was in the form of a “unit”.

But he assured that the government is in the process of repatriating all the assets left in the BSI Bank, to Malaysia as soon as possible.

Ahmad Husni’s explanation that 1MDB’s redemption was mistaken came after Najib reversed his earlier statement to say that the fund’s US$1.1 billion in Singapore is in assets not cash.

In March, Najib told Parliament that the cash redeemed from the funds, which were kept in the Cayman Islands, was then with BSI Bank in Singapore.

Meanwhile, 1MDB president Arul Kanda Kandasamy told Singapore’s Business Times that the “cash is in our accounts and in US dollars”. “I can assure you (about that) … I have the statement,” the 38-year old chief told the newspaper.

Interestingly, it was reported recently that whistle-blower portal Sarawak Report has been passed disturbing evidence, showing that BSI Bank has dismissed documents supplied by 1MDB relating to its Brazen Sky Ltd account in Singapore, saying they are false bank statements.

According to Sarawak Report, the documents were supplied to various authorities by Arul and purported to show Brazen Sky’s statement of account in November 2014. And the Swiss private bank has told the Singapore authorities that the document did not originate from them and does not represent a true account of the assets of the 1MDB subsidiary.

Nonetheless, Najib yesterday denied the allegations that Arul had obtained falsified documents that were not owned by BSI Bank in Singapore.

“Your statement (referring to the Raub member of parliament Datuk Mohd Ariff Sabri Abdul Aziz) that Arul Kanda had obtained bank documents that were not owned by BSI Bank is not true,” Najib said this in his reply to a written question that Arul had received the bank statement that does not belong to BSI.

Mohd Ariff had asked Najib if 1MDB would be liable for legal action by BSI if it was a false statement.

This article first appeared in The Edge Financial Daily, on May 22, 2015.