Malaysia still way off repaying scandal-tainted 1MDB’s outstanding debt
Finance ministry to repay only the principal amount this year and commits to repay balance still owed by the state fund
Kuala Lumpur — Malaysian authorities said on Thursday they had recovered sufficient money linked to scandal-tainted state fund 1Malaysia Development Berhad (1MDB) to pay only the principal amount of the debt still owed by the firm this year.
1MDB raised billions of dollars in bonds, ostensibly for investment projects and joint ventures, between 2009 and 2013. But authorities suspect more than $4.5 billion was misappropriated by high-level officials and their associates in an elaborate criminal scheme spanning the globe.
Malaysia’s finance ministry in a statement said a trust account set up to collect recovered 1MDB funds has received 19.1bn ringgit ($4.58bn), including $80m from KPMG, which the auditing firm paid to settle a lawsuit filed against it by 1MDB.
The government has repaid 13.3bn ringgit of 1MDB’s debt so far, with 38.81bn ringgit still outstanding at December 31, the ministry said.
“The current balance of the trust account is sufficient to pay only the principal amount of the bonds for 2022,” it said. “Once all the trust account funds are utilised, the government will continue to bear the obligation to pay the balance of 1MDB’s debts.”
The ministry said it remained committed to 1MDB asset recovery efforts and to ensure sufficient funds to manage the national financial burden created by the scandal.
At least six countries are investigating 1MDB, cofounded by former Prime Minister Najib Razak, in a scandal that has implicated top officials, banks and financial institutions around the world.
A Malaysian court last month upheld a conviction against Najib, who was sentenced to 12 years in prison and fined millions of ringgit for corruption and money laundering linked to funds misappropriated from a 1MDB unit.
He denies wrongdoing and remains on bail pending another appeal.
Reuters