KUALA LUMPUR (Oct 20): 1Malaysia Development Bhd (1MDB) and wholly-owned subsidiaries can enjoy tax exemption for 10 years based on Malaysian tax regulations, according to Prime Minister Datuk Seri Najib Tun Razak.

Najib, who is also finance minister, said based on the Income Tax Act 1967, the tax exemption covered dividends received by state-owned 1MDB.

"1MDB and its wholly-owned subsidiaries can enjoy tax exemption including dividend for a period of ten years in line with the Section 127(3A) of the Income Tax Act 1967.

"However, other subsidiaries acquired by 1MDB are not entitled to the tax exemption," said Najib, who is chairman of 1MDB's board of advisors.

Najib said this in Parliament via a written reply to Kampar MP Dr Ko Chung Sen, who asked about taxes paid by 1MDB every year since 2009.

1MDB was formerly known as Terengganu Investment Authority (TIA), which was set up in 2008. TIA changed its name to 1MDB in 2009.

Today, Dr Ko also asked Najib about 1MDB directors' remuneration. Ko enquired about the annual salary and bonus paid to 1MDB's chief executive officer since its inception in 2009.

Najib said 1MDB was a company set up under the Companies Act 1965 and any agreements entered into by 1MDB were confidential. He said these included contracts of employment between the company and its workers.

In another written reply to Rantau Panjang MP Siti Zailah Mohd Yusof, Najib said 1MDB had always fulfilled its debt obligations consistently.

One way to cut 1MDB's debt was through the proposed sale of its electricity generation assets under Edra Global Energy Bhd.

Najib said the last bid for Edra would be received this month (Oct 2015) and the sale and purchase agreement was expected to be signed in Dec 2015.

Last Friday, 1MDB said in a statement it had so far received three "final, binding and fully-funded offers" for Edra. 1MDB did not reveal who the bidders were, only indicating the list comprised Malaysian and international buyers.

On the same day, Malaysian state-controlled utility Tenaga Nasional Bhd said it had made a conditional offer to acquire Edra from 1MDB.

Tenaga said the "conditional offer is subject to TNB (Tenaga) finalising the confirmatory due diligence process as well as finalising and executing the share purchase agreement".

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)