KUALA LUMPUR (July 31): Malaysia must not embroil itself in a second international money laundering scam in order to cover up the first, which will cement Malaysia’s notoriety as the kleptocratic capital of the world, said opposition lawmaker Tony Pua.
He was commenting on a July 26 report by The Sarawak Report of an alleged plan to double the price tag of the East Coast Rail Link (ECRL) project from RM30 billion to RM60 billion. The whistleblower site, citing several documents, claimed that the ECRL project would be awarded to Chinese state-owned company China Communications Construction Co Ltd (CCCC) to pay off troubled 1Malaysia Development Bhd's (1MDB) bad debts.
"The massively inflated alleged cost of the ECRL to be awarded to CCCC lends credence to the Sarawak Report documents, which detailed how the 'excess' was to bailout the debt-stricken 1MDB," said Pua, who is DAP national publicity secretary and Member of Parliament for Petaling Jaya Utara, in a statement today.
Pua noted that the nominated company by CCCC will then pay 1MDB US$850 million (RM3.4 billion) for the purposes of repayment for International Petroleum Investment Co (IPIC) advances, and assume the debt of 1MDB subsidiaries amounting to US$4.78 billion (RM19.4 billion) inclusive of interest which had been guaranteed by IPIC.
"These payments are clearly meant to go towards the settlement with IPIC, which has taken 1MDB to the London arbitration court for the amount of US$6.5 billion," he added.
1MDB and IPIC are locked in a tussle that spilled over to repayments on bonds issued by 1MDB. Four years ago, IPIC had guaranteed US$3.5 billion of 1MDB bonds but claimed it had not received payment for the guarantee or other monies and interest owed.
Meanwhile,Pua said Prime Minister Datuk Seri Najib Razak's silence on the ECRL matter will no doubt leave Malaysians believing another bailout is underway.
"However, this is no ordinary bailout. When the Parliament approved a special bill to allocate RM6 billion for Khazanah Nasional Bhd to rescue Malaysian Airline System Bhd, that was a bailout. When the Ministry of Finance approved a RM4.5 billion soft loan for the Port Klang Free Zone, that was a bailout.
"In this case, the Najib administration will be attempting a secret bailout of 1MDB via fraud and deceit," said Pua.
"If CCCC were to accept the fraudulently inflated contract to carry out the money laundering on behalf of the Najib administration, then the US$24 billion company listed on the Hong Kong Stock Exchange will itself be party to the money-laundering scam and subjecting itself to prosecution in jurisdictions around the world," he added, urging that the Cabinet put a stop to the ECRL contract immediately.
On Thursday, Barisan Nasional strategic communications director Datuk Abdul Rahman Dahlan said the cost of the ECRL project had not been determined.
He said the government had not firmed up the value of the project as there were other matters that needed to be looked into, adding that the ECRL project would take up to 20 years to complete.
The 600km rail line will reportedly connect Kuala Lumpur with Bentong in Pahang. It will also link Terengganu and Kelantan.
On July 20, the US Department of Justice announced that it had filed civil suits to seize more than US$1 billion in assets associated with "an international conspiracy to launder funds misappropriated" from 1MDB. The strategic development company, wholly-owned by the Ministry of Finance, has amassed debts totalling RM42 billion since its inception in 2009.