Shahrol: Government did not inject cash into 1MDB

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KUALA LUMPUR: 1Malaysia Development Bhd’s (1MDB) CEO Shahrol Halmi refuted the speculation that the investment firm has received as much as RM15 billion cash from the federal government.

And the investment firm, which is wholly owned by the federal government, will release its accounts to the Companies Commission of Malaysia (CCM) for the public perusal, said Shahrol in an interview with Bernama yesterday.

“1MDB has never received any cash injection from the government beyond its initial RM1,000,002 in paid-up capital. There is absolutely no truth that the government has injected the purported RM10 billion to RM15 billion in cash into 1MDB and neither have we raised RM15 billion in loans as indicated by some quarters,” Shahrol was quoted by Bernama.

He cited the firm’s RM100 million commitments to corporate social responsibilities (CSR) activities, which were “solely derived” from its earnings, as an example.

1MDB, which was set up in 2009, issued RM5 billion 30-year Islamic Medium Term Notes (IMTN) last year — the first-ever such long tenure Islamic papers issued by a Malaysian entity.

“There is a view that 1MDB is taking in too much loan too fast. Some say this is not sustainable. (But) given the scale of the strategic projects that we are undertaking, we need a large reservoir of funds to swiftly undertake projects that have been fully evaluated,” said Shahrol.

1MDB posted a net profit of RM425 million in its maiden year of operation.

Shahrol noted that 1MDB’s accounts as at March 31, 2010 had been fully audited and signed by KPMG. Meanwhile, Deloitte & Touche was involved in the valuation and analysis of 1MDB’s portfolio, and Ernst & Young provided tax advice for 1MDB.

This article appeared in The Edge Financial Daily, October 12, 2010.