KUALA LUMPUR: Malaysia’s settlement with Abu Dhabi over transactions involving 1Malaysia Development Bhd (1MDB) showed the US$3.51 billion the state investment fund had earlier said it paid to International Petroleum Investment Co (IPIC) was not as claimed, an opposition lawmaker noted yesterday.

“Instead, the funds were misappropriated or laundered as documented widely in the US Department of Justice (DoJ) charges against Jho Low and company, and Singapore’s prosecution [of] its local banking officers,” said DAP national publicity secretary and Petaling Jaya Utara member of parliament Tony Pua in a statement yesterday.

“1MDB’s settlement with IPIC [on Monday] is an affirmation by 1MDB that it has lost US$3.51 billion, which was purportedly paid to IPIC and its subsidiary Aabar Investment PJS Ltd.” 

In two separate announcements by 1MDB and IPIC on Monday, it was made known the two parties agreed that 1MDB and the Ministry of Finance Inc (MoF Inc) will pay US$1.2 billion to IPIC by year end to settle a loan and interest payments that were paid on behalf of 1MDB in 2015, and assume liability for future payments of interest and the principal for two bonds totalling US$3.5 billion, previously co-guaranteed with IPIC.

“IPIC’s [announcement] clearly shows it got exactly what it had wanted — the return of US$1.205 billion of cash advances [that were given] to 1MDB since June 2015 and to discharge itself entirely as a guarantor for 1MDB’s US$3.5 billion worth of bonds,” said Pua. 

“However, of greater significance is the fact that 1MDB’s concession to the settlement terms is a direct affirmation and confirmation that 1MDB has lost US$3.51 billion worth of payments, which was purportedly paid to IPIC and its subsidiary Aabar Investments PJS.

“Last year, 1MDB and its president Arul Kanda Kandasamy informed the auditor-general and the Public Accounts Committee that US$3.51 billion was made to Aabar Investments PJS (Aabar BVI), a company registered in the British Virgin Islands. It has already been widely known, and confirmed by the DoJ, that Aabar BVI is a fraudulent impostor company. 

“However, 1MDB and Arul Kanda continued to insist that it is a wholly-owned subsidiary of the IPIC group.”  

Pua asked: “The question then is: If we have indeed paid the sum totalling US$3.51 billion to IPIC or its subsidiary, why then are we allowing IPIC to relieve itself as an ultimate guarantor for the bonds? And why is [the] MoF Inc assuming the US$3.5 billion of liability?” 

He also questions why Malaysians now have to pay more than double (US$7.01 billion/RM30.63 billion) of what was actually borrowed — US$3.5 billion in bonds — by 1MDB.