KUALA LUMPUR (Mar 17): Putrajaya's letter of support to debt-laden 1Malaysia Development Bhd is tantamount to a guarantee on the loans taken by the fund, the DAP said today.

Party publicity chief Tony Pua said although all ministers had insisted that the loans guaranteed by the federal government amounted to only RM5.8 billion, the actual figure was more than RM16 billion of the sovereign wealth fund's RM42 billion debt.

Speaking at the Parliament lobby today, Pua said 1MDB's RM16 billion debt should be added on to the government's contingent liability.

He said that previously Deputy Finance Minister Datuk Ahmad Maslan had repeatedly denied that the government has issued a letter of support for 1MDB via its subsidiary 1MDB Global Investment Limited to raise a US$3 billion bond on November 6 last year.

He added that the deputy minister subsequently had to apologised in Parliament by conceding that there was such as letter, but that Maslan had insisted that the letter was not tantamount to a guarantee.

But Pua said that in the Ministry of Finance's written reply to his question last week, Datuk Seri Najib Razak had admitted in Parliament that in the event 1MDB Global Investment failed to repay its loans after utilising all its internal funds and assets, then the letter of support from the government becomes 'effective'.

"Just as a rose by any other name smells just as sweet, a government loan guarantee by any other innocuous names like a letter of support remains tantamount to a guarantee.

"But the more pertinent question is, where has the US$3 billion disappeared to?" he asked.

Pua also said that while critics have mostly focussed on the mysterious US$2.32 billion of investment in the Cayman Islands, the 1MDB Global Investment Limited funds have often escaped scrutiny.

He said the money was raised by 1MDB Global Investments in March 2013 to jointly fund Abu Dhabi Malaysia Investment Company Limited, a 50:50 joint venture between the 1MDB Global Investments and Aabar Investments, an investment arm of the Emirate of Abu Dhabi.

According to Pua it was reported that UAE had committed RM39 billion to two projects that would create hundreds of thousands of well-paying jobs for Malaysians'.

The projects involve the setting up of a RM21 billion strategic petroleum reserve in Tanjung Piai, Johor and a RM18 billion strategic partnership in the Tun Razak Exchange.

"However, none of these projects have materialized and the joint venture remains in limbo.

"Despite that, 1MDB had revealed in its March 2014 financial statements that nearly half the money it had raised in the prior year has already been utilised," he said ,adding that the report also said that the US$1.44 billion had already been used up by 1MDB 'for working capital and debt repayment purposes'.

Pua went on to add that it was also reported that a 'portion of the proceeds from the private debt securities amounting to US$1.56 billion had been placed in various investment portfolios under custody of a licensed financial institution with good credit ratings.'.

He said that just as they were all clueless about the segregated portfolio investment company in the Cayman Islands, they were now scratching their heads as to where this US$1.56 billion  was located or invested.

"Why is 1MDB so cash-strapped and desperate for a massive bailout from the government when it has billions of ringgit of unutilised funds or liquid investments sitting in some 'licensed financial institution with good credit ratings somewhere on this planet.

"And just like the mysterious money that is now sitting in BSI Singapore which cannot be repatriated, 1MDB and government must explain how these government guaranteed funds have been utilized, abused or misappropriated." he said.