1MDB money not kept in Cayman Islands, says Najib

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KUALA LUMPUR (Apr 10): State investment vehicle 1Malaysia Development Berhad (1MDB) has not parked money in the Cayman Islands, said Prime Minister Datuk Seri Najib Razak.

He said that the Cayman Islands, being a tax haven, was merely for registration purposes, adding that there was nothing wrong with having an account there.

He said there were some 200 Malaysian companies with accounts in the Cayman Islands.

"They keep money overseas because they have debts outside. Rather than bring money back, they keep it overseas and make profit through foreign exchange rates and others.

"Time will determine but at a certain time, the money will be brought back to Malaysia," he said in a special interview on TV3 yesterday to answer to criticism levelled against him over the debt-ridden 1MDB controversy.

One of the harshest critics on the issue is former prime minister Tun Dr Mahathir Mohamad, who has questioned why the money was not sent back to Malaysia, and was now parked in Singapore after the Cayman Islands.

In his blog posting recently, Dr Mahathir questioned if it was true that the money could not be brought back to Malaysia by the prime minister and finance minister "because Bank Negara will ask too many questions".

Najib said the system was independent and all transactions were done with the knowledge of Bank Negara, which also knew of the movement of the funds.

Asked if he had explained to Dr Mahathir about 1MDB, he said he did not do so and the veteran leader also did not raise the matter to him but he knew that Dr Mahathir had met with 1MDB board of directors and its chief executive.

Asked if he would get 1MDB to be more transparent in its dealings in future, Najib said yes, adding that the company was also undergoing a rationalisation process.

"We need some time but the plan is ready and we are in the implementation stage."

Najib also said 1MDB was an investment company that started with a capital of only RM1 million, compared to other government-owned companies like PNB (Permodalan Nasional Berhad) and Khazanah Nasional that got much more capital.

"When it wanted to expand its business, it had to take loans. But its assets are more that its liabilities. It will need time to liquidate its assets to clear its debts."

Najib said there was a difference between money disappearing and loans being taken.

He said the business model of 1MDB could be questioned and he was ready to hear the different views on the matter.

"But I want to stress that I will not condone and I do not accept any abuse of power in 1MDB. For instance, its money being siphoned off and others.

"That is why when Deloitte cleared its books, I wasn't happy and I instructed the Auditor-General (A-G) to look into the books thoroughly, and after that the Public Accounts Committee (PAC) as well.

“The committee will look into the A-G's report (on 1MDB). Let the process take place."

Asked if both had been given a timeframe to complete their tasks, he said none had been given but he wanted the outcome of the probe to be ready as soon as possible because he had promised and given guarantees to the people that any wrongdoing would not be tolerated.

Najib also said the A-G had been ordered to investigate whether 1MDB's funds had been misused to fund a film.

"I want to know (if that happened). It is one of the things the A-G has to find out."

He said that there had been allegations that money was used to fund a film and he did not want to defend anything.

"It involves my family and I want the A-G to look into it."

Najib, who is also chairman of 1MDB's board of advisers, is suing PAS mouthpiece HarakahDaily over a story titled “Dana 1MDB biayai syarikat filem Riza Aziz?” (1MDB funds used to fund Riza Aziz’s film company?) that he had deemed to be defamatory to his family.

The recent article had questioned how Najib’s stepson Riza Aziz financed his company, Red Granite Productions' 2013 film, “The Wolf of Wall Street”, alluding that there was a link between 1MDB funds and the film.

Najib had been pressured to explain the situation with 1MDB that had recorded RM42 billion in debts over the past few years.

On Thursday, Dr Mahathir had slammed him for failing to answer simple questions on 1MDB and the murder of Altantuya Shaariibuu.

Dr Mahathir said Najib had instead, asked people to support him.

Last week, Dr Mahathir had also questioned the need for Putrajaya to give 1MDB a standby credit facility of almost RM1 billion, the fund's purchase of government land and its dubious deal with little-known oil company, PetroSaudi International.

He then questioned the source of funds for Riza to purchase luxury properties in New York through businessman Low Taek Jho, who is better known as Jho Low.

"There are many other allegations and questions against 1MDB that was set up by Datuk Seri Najib and which is controlled by him as adviser that have not been answered, other than to deny and call the allegations lies.

"The reports in New York and London newspapers are extremely embarrassing for the country," Dr Mahathir added, referring to foreign media reports on 1MDB and Low.