1MDB’s problems no small matter, DAP tells Treasury man

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KUALA LUMPUR (Mar 20): DAP has slammed the Treasury secretary-general for calling 1Malaysia Development Bhd's (1MDB) debt scandals a "small issue involving one firm", saying that it was a dereliction of duty to have let the government-owned fund slide into such a state.

DAP publicity chief Tony Pua took Putrjaya's top finance civil servant, Tan Sri Dr Mohd Irwan Serigar Abdullah, to task for brushing off concerns about the strategic investment fund's massive RM42 billion debts by giving the excuse that it was undergoing a restructuring process.

"Such nonchalant attitude from the powerful treasurer-general certainly does not breed any confidence that the 1MDB scandal can be resolved in the interest of Malaysians as it appears that it is more important to cover up the scandal so that it doesn’t further affect the plunging image of his political masters," Pua said in a statement today.

He said Irwan must explain how he allowed 1MDB to "degenerate to such a deplorable financial state" and whether he had put any governance in place to save the state investment company from financial mismanagement.

"Why did the Ministry of Finance appoint a representative in 1MDB’s board of directors to ensure that all decisions by the 'strategic development fund' are made with the necessary transparency and due diligence?

"As the top civil servant looking after the interest of the tax-payers’ monies, Tan Sri Irwan has failed in fulfilling his responsibilities with regards to the tens of billions of ringgit possibly lost in the 1MDB scandal, and he now has the cheek to tell Malaysians that it is 'a small issue involving just one company'?"

Irwan was quoted as saying this by Bernama yesterday on the sidelines of the 1Asean Entrepreneurship Summit 2015.

Pua said 1MDB, a wholly-owned subsidiary of the Finance Ministry, had gotten involved in dubious deals, such as the joint venture with PetroSaudi International, a company of little track record, where US$700 million was eventually channeled to an unrelated third party.

1MDB had also overpaid for all its power plant acquisitions in its attempt to “diversify” its business.  In turn, 1MDB took on even more debt, RM20.9 billion to acquire these overpriced RM12.1 billion worth of assets, Pua noted.

He also highlighted another 1MDB investment in US$3 billion of bonds for another joint venture in March 2013 which never materialised.

"The money has since been abused for other purposes and 'invested' in funds which are not properly accounted for, Pua, who is also Petaling Jaya Utara MP, said.

The DAP lawmaker said Putrajaya had consistently defended 1MDB, and yet has just given it a bailout of RM950 million to help it service its debts.

He also noted that Second Finance Minister Datuk Seri Husni Hanadzlah had recently, for the first time, conceded that the current monster RM42 billion debt structure in 1MDB was “unsustainable” and admitted that 1MDB was facing a liquidity crunch.

As such it was irresponsible of Irwan to dismiss 1MDB's debt problems and its impact on Malaysia so lightly, Pua said.