1MDB is not bankrupt, says Najib

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KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) is not bankrupt, said Prime Minister Datuk Seri Najib Razak.

Najib, who is is also finance minister, told opposition lawmakers that 1MDB, a 100%-owned unit of the government, paid its RM2 billion debt to Malayan Banking Bhd (Maybank) and RHB Bank Bhd on Feb 13 this year.

“In light of this, the issue of 1MDB has bankrupted does not arise,” Najib said in a written reply to a parliamentary question by Jelutong Member of Parliament Jeff Ooi on 1MDB yesterday.

Ooi asked Najib whether 1MDB was bankrupt as it had failed to pay its RM2 billion loan from Maybank and RHB Bank a few times, based on a schedule stated in the contracts.

Ooi also asked Najib why Bank Negara Malaysia did not take any action against 1MDB.

The state investment fund, which invests in real estate and power plants, has been closely watched by global investors after news reports indicated that the company had some RM42 billion of debt.

Former prime minister Tun Dr Mahathir Mohamad has been one of the strongest critics of 1MDB.

Reuters reported that Dr Mahathir had lashed out at Najib on his (Dr Mahathir’s) blog on Tuesday, questioning the latter’s refusal to address concerns about 1MDB, after calling for him to step down over the weekend.

1MDB, whose advisory board is chaired by Najib, is facing criticism over its debt of nearly RM42 billion (US$11.5 billion) and alleged financial mismanagement.

Najib has ordered an audit into the accounts of the fund.


This article first appeared in The Edge Financial Daily, on April 9, 2015.