KUALA LUMPUR (July 14): 1Malaysia Development Bhd (1MDB) has questioned a Federal lawmaker’s allegations that it shared tampered financial statements with banks and that such an action would trigger "an event of default".

In a statement this afternoon, 1MDB said Petaling Jaya Utara MP Tony Pua’s allegations earlier today, which have since been widely reported, was “unsubstantiated and damaging” and that Pua, a third party, not a bank to 1MDB nor privy to 1MDB’s internal dealings, has no basis making those allegations.

“We note that YB Tony Pua has declined to elaborate further on the 'valid reasons' behind his statements. In any event, interaction between 1MDB and its bankers, including confidentiality obligations, are governed by contract and national law,” said 1MDB.

It also said none of its lenders has declared an event of default for the reasons highlighted by Pua.

It further said its official financial statements are also publicly available at the Companies Commission of Malaysia (CCM) website, and that any concerned party can access the documents for verification purposes with “a few clicks of a mouse”.

“1MDB regrets that such statements on the company are being made by a third party such as YB Tony Pua and reported as fact on social media and online news websites.

“Such actions impact the day-to-day operations of 1MDB, a 100%-government-owned company, and the implementation of the 1MDB rationalisation plan,” said 1MDB. It further requested that all parties refer to official statements issued by 1MDB and its publicly available audited accounts for factually correct information.

Pua had alleged that 1MDB had changed the word “utilised” to “set aside” in its latest audited financial statements for March 2014, which he charged was misleading and provided a false assurance to lenders that 1MDB had already “set aside” nearly US$1.22 billion of cash to pay them when its interest and loans become due.

Furthermore, he said he was seriously concerned about the integrity of the various documents which it had submitted to the Auditor-General — including the minutes of the Board of Directors, Directors’ resolutions and other relevant documents — in the latter’s probe into its accounts.

“By changing just one word, from 'utilised' to 'set aside', 1MDB has transformed entirely the meaning of the paragraph. Based on the certified true copy lodged with the SSM, the auditors confirmed that the US$1.22 billion redeemed has been more or less used up,” Pua had claimed.

He had also said this amounted to a clear breach of warranty and representation made by 1MDB to its lenders and was automatically tantamount to an “event of default”, which meant all 1MDB’s outstanding loans to these institutions will become immediately due and payable.

Pua had also noted that based on publicly available information, 1MDB still owed RM3.5 billion to a consortium of 4 local banks — Maybank, RHB, Alliance and HwangDBS Bank. Other banks with hundreds of millions of ringgit in exposure to 1MDB include Ambank and Affin Bank.

1MDB is currently under investigation by a special task force over allegations that billions of ringgit were channelled into Prime Minister Najib Razak's personal bank accounts from 1MDB.