KUALA LUMPUR: Former second finance minister Datuk Seri Ahmad Husni Hanadzlah, who reportedly said handling 1Malaysia Development Bhd’s (1MDB) issues previously made him ill, has turned around to question not just why the fund was set up, but also some of its more controversial dealings in Parliament yesterday.

Ahmad Husni, who is also the member of parliament for Tambun, said the questions needed to be asked because he was concerned that allegations of financial wrongdoings linked to the state-owned investment fund would negatively impact the global perception of Malaysia.

Among the questions he raised were those in relation to 1MDB’s transactions involving Abu Dhabi’s state-owned fund, International Petroleum Investment Co (Ipic), and Aabar Investments PJS Ltd (Aabar BVI), a company registered in the British Virgin Islands, which has almost the same name as Ipic’s wholly-owned subsidiary, Aabar Investments PJS.

“Why did we transfer nearly US$4 billion into Aabar BVI, which is not owned by Ipic? Why was there no legal action taken against 1MDB’s management for transferring the money to the wrong firm? Why wasn’t any legal action taken against the owners of this firm for this misappropriation of funds?” asked Husni during the Budget 2017 debate in Parliament.

He also asked about the fallout between 1MDB and Ipic. “What happened to the binding term sheet with Ipic? Why didn’t 1MDB fulfil the agreement until Ipic had to file for arbitration to seek US$6.5 billion, equivalent to RM26 billion, from 1MDB? Imagine the financial consequences to the country if we lose [the arbitration],” he said.

He was referring to the arbitration Ipic sought to recover the US$6.5 billion from 1MDB after it said 1MDB had not performed its obligations in a debt deal agreed between the parties in May last year.

Under the term sheet, Ipic would provide 1MDB US$1 billion to settle some liabilities in exchange for a transfer of assets, and the assumption of interest obligations on two bonds.

In return, 1MDB was obliged to make collateral payments to Ipic’s Aabar by end-2015. 1MDB contended it had made the payments to Aabar BVI. But Ipic said Aabar BVI was not under Ipic, and that the sums were never received. 1MDB subsequently said it could have been a victim of fraud.

Besides that, Ahmad Husni also wanted to know what happened in the Bandar Malaysia stake sale. “I used to work in a bank and when [as much as] a 60% equity is sold, payment must be made immediately. Why did we allow [full] payment for the Bandar Malaysia stake to be [deferred] until 2022?”

He was referring to 1MDB’s sale of its 60% stake in Bandar Malaysia Sdn Bhd to a 60:40 consortium comprising Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corp (M) Sdn Bhd, respectively, for RM7.41 billion.

The RM4 billion loan provided to former 1MDB’s subsidiary SRC International Sdn Bhd was also brought up.

“Why did Kumpulan Wang Amanah Persaraan (KWAP) provide a loan of RM4 billion [to SRC], which was allowed a one-off drawdown? Usually, when a loan is provided, drawdown is done progressively, with permission.

“Further, SRC’s principal business is in mining, but only RM400 million was spent on mining, while the rest was used for investments. So another issue here is why didn’t KWAP take action since the loan was not used for its intended purpose?” he asked.

“I’m not raising these issues for political [mileage]. I just feel that I have the right to know because it will determine my future and our rakyat’s future. The prime minister said perceptions determine our survival.

“These are serious issues; we need to know. If we lose [the arbitration], I believe our ratings will fall. When that happens, there will be a systemic effect on our economy. Foreign investments will leave and our economy will slide. Our economy is already deteriorating in terms of business and job opportunities. A lot of companies are closing down; staff are being laid off. This, is the reality,” he added.

He also said it is imperative to have a government with dignity and integrity, one that will apply good governance standards and stay away from political patronage, to ensure that every single sen spent is for the good of the country and its people.

The former minister, who was appointed the government’s spokesman in May last year on matters pertaining to 1MDB, resigned from the cabinet prior to Prime Minister Datuk Seri Najib Razak’s announcement of a cabinet reshuffle in June this year. He also quit all his party posts in Umno.

He told a local daily months later that he had been under heavy stress for months, with prolonged high blood pressure, when dealing with the controversy over the debts and financial affairs of 1MDB, which is fully owned by the finance ministry.