Najib: RM4b loan to SRC has been invested

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KUALA LUMPUR: The RM4 billion government-guaranteed Islamic loan from Kumpulan Wang Persaraan (Diperbadankan) (KWAP) that was taken by SRC International Sdn Bhd has been invested in several assets, said Prime Minister and Finance Minister Datuk Seri Najib Razak. However, he did not specify what the assets are.

Najib said the financial accounts of SRC International in the financial year ended March 31, 2013 (FY13) will be filed together with the accounts of FY14 with the Companies Commission of Malaysia (SSM) before the end of this month.

“The purpose for the loan was to fund start-ups, operation and investment of several assets that have been identified with potential to benefit the country’s growth in the long term,” he said in his written reply to Petaling Jaya Utara MP Tony Pua in Parliament, which was obtained yesterday.

Pua earlier questioned the whereabouts of SRC International’s RM4 billion loan from KWAP and SRC International’s failure to submit its annual accounts on a timely basis.

Pua noted that the loan was disbursed to SRC International in two tranches in August 2011 and March 2012.

The Ministry of Finance (MoF) acquired SRC International from loss-making 1Malaysia Development Bhd (1MDB) in February 2012, shortly after the second RM2 billion tranche was disbursed to SRC International.

According to Pua, the loan bears a profit rate of 4.65% for the first three years and a profit rate equivalent to Malaysian Government Securities profit rate plus 0.7% for the remaining tenure. The loan was disbursed in two tranches in August 2011 and March 2012.

“Despite the size of the loan and entity, the financial accounts of SRC International were last filed for the year ended March 31, 2012 (FY12). The accounts for FY13 which were due by September 2013 have not been submitted,” said Pua.

“The question is, why is it so difficult for a company with hardly any activity other than a mega loan submit its financial statements to the authorities? I had asked this question in Parliament and received a response from the finance minister on Oct 14.

“There was, however, no reason given for the delay, other than to say that the financial statements for both FY13 and FY14 will be submitted before the end of October,” he added.

In SRC International’s filing with SSM for FY12, it stated that the company was principally involved in projects associated with the exploration, extraction, processing, logistics and trading of conventional and renewable energy resources, natural resources and minerals, including all other activities related thereto, any partnerships, joint ventures or arrangements for sharing profit, union of interest or cooperation and property holding.

For FY12, it was reported that SRC did not have any revenue, but stated that the company had obtained a RM4 billion Islamic term financing from KWAP guaranteed by the government.

This article first appeared in The Edge Financial Daily, on October 17, 2014.