Don’t bend the rules for 1MDB, Anwar tells Putrajaya

Opposition leader Datuk Seri Anwar Ibrahim said that a letter of support from the Minister of Finance is considered a guarantee. — Picture by Yusof Mat Isa
Opposition leader Datuk Seri Anwar Ibrahim said that a letter of support from the Minister of Finance is considered a guarantee. — Picture by Yusof Mat Isa

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KUALA LUMPUR, Nov 13 — Datuk Seri Anwar Ibrahim today warned Putrajaya against manipulating the checks and balances set out by the Treasury in order to counter the allegations against 1Malaysia Development Berhad (1MDB), saying that the fund is now “the government’s greatest liability”.

The former deputy prime minister, who also served as finance minister from 1992 up to his sacking in 1998, insisted that there was no difference between a letter of support and a sovereign guarantee as Putrajaya is still liable if the state investment arm fails to service its loan.

“In the eight short years I was finance minister, a letter of support from the minister of finance is considered a guarantee... that is the reason it became an issue with Port Klang Free Zone (PKFZ),” the opposition leader told reporters at the Parliament lobby today.

“The practice is for the Finance Ministry to refer to the Cabinet for approval, which I believe did not take place... this liability is the government’s responsibility; this is why they should not manipulate by ignoring guarantee procedure.”

The Permatang Pauh MP stressed that a letter of support was tantamount to a guarantee as it was still an undertaking by the government.

At height of the PKFZ scandal, the Finance Ministry had asserted that any letter of support issued by the Finance Ministry must be done with the Cabinet’s approval as it is considered a contingent liability.

Former transport minister Tun Dr Ling Liong Sik was charged with deceiving the Cabinet into approving the land purchase for the PKFZ, which resulted in wrongful losses for the government.

Dr Ling was, however, acquitted.

Yesterday, Deputy Finance Minister Datuk Ahmad Maslan insisted that Putrajaya’s letter of support for 1MDB to raise US$3 billion (RM10.02 billion) in bonds last year is not an “explicit guarantee”.

Unlike a letter of support, an explicit guarantee is legally binding under the Loans Guarantee (Bodies Corporate) Act 1965, Ahmad had explained, asserting that 1MDB – which was set up to help drive Putrajaya’s strategic investments – is financially sound is settle its debts.

Opposition MPs contended that the letter of support still amounted to a guarantee as it confirms that Putrajaya has agreed to inject necessary capital or make payments on behalf of 1MDB to ensure its obligations are met.

Barisan Nasional (BN) Backbenchers, who backed Ahmad, had then threatened to refer Anwar, together with Petaling Jaya Utara MP Tony Pua to Parliament’s Rights and Privileges Committee for misleading the Dewan Rakyat with unfounded claims against the sovereign wealth fund and its wholly-owned subsidiaries.

But Anwar shrugged off the threat, saying that it has become the tactic to avoid clarification on the subject.

“We will deal with it... I’ve been suspended, imprisoned... it is not a problem,” he said.

However, Anwar said that he would be appealing to the committee to make the hearings public.

1MDB has been dogged by negative publicity over massive fees paid for bond sales, the near one-year delay in publishing its financial accounts, and most recently, changing auditors.

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