(June 30): DAP lawmaker Tony Pua has taken 1Malaysia Development Bhd (1MDB) to task for alleging that he deliberately misled the public by failing to mention that the indemnity in the transaction between 1MDB and Abu Dhabi's International Petroleum Investment Company (IPIC) applied both ways.

Calling it a classic misdirection by the state fund whenever faced with tough questions, the DAP national publicity chief said he never disputed that IPIC also provided a vice-versa indemnity.

But he said the indemnity amounted to the fact that IPIC had to advance US$1 billion (RM3.77 billion) and pay for the year's worth of interest, or 1MDB would not need to fulfil its part of the bargain on the “transfer of assets”.

"There is absolutely no loss involved for IPIC in such an event.

"What’s more, IPIC has already fulfilled its obligations to advance US$1 billion to 1MDB and has assumed the obligations to pay (on an interim basis) all interest due under two IPIC-guaranteed 1MDB financing.

"Hence the question of IPIC indemnifying 1MDB is moot," Pua said in a statement today.

Pua, who is the Petaling Jaya Utara MP, added that indemnity meant that the ministry guaranteed to pay IPIC in the event 1MDB failed on its part of the bargain by June 30, 2016.

Yesterday, 1MDB denied Pua's claims that Putrajaya guaranteed the firm's loans with IPIC.

1MDB said the Pua misled the public when he quoted the London Stock Exchange's report as proof that Putrajaya was guaranteeing US$4.71 billion of 1MDB's loans from IPIC.

The London Stock Exchange said: "1MDB and the Finance Ministry have agreed to perform the obligations contemplated in the binding term sheet and to indemnify IPIC and Aabar for any non-performance, and vice versa".

Pua said this meant Putrajaya provided a US$4.71 billion (RM17.7 billion) guarantee to IPIC, and in the event "1MDB is unable to fulfil its obligations to transfer assets worth the same value to IPIC by June 30, 2016, the government will indemnify IPIC by assuming the obligations."

Pua came to the US$4.71 billion figure by totalling the US$1 billion loan IPIC provided to 1MDB on June 4, the US$3.5 billion bond IPIC had assumed from 1MDB and an estimated US$209.65 million of interests.

But 1MDB countered this, saying the indemnity Pua cited was a standard clause in commercial transactions. – The Malaysian Insider