KUALA LUMPUR, March 25 — Billionaire Tan Sri T. Ananda Krishnan’s Tanjong Public Limited Company helped 1 Malaysia Development Berhad (1MDB) secure the cash it needed for a RM2-billion loan instalment in February, Parliament was told today in the latest revelation on the controversy.
According to Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah, Tanjong had arranged the funding with the help of private investors.
“1MDB’s cash flow is not enough and it took a RM2 billion refinancing,” he said, adding that refinancing is a normal procedure in the corporate sector.
Ahmad Husni noted there was misconception on the matter and clarified that the loan had not been refinanced by the financial institution.
“It is not the bank, but from outside and was managed by Tanjong,” he said referring to Ananda’s company.
“Tanjong helped to obtain the RM2 billion fund with a principal repayment tenure of 15 months, and interest repayment (to be settled) within six months… there is no exchange risk and (this) was arranged by Tanjong,” he added.
On March 14, news portal Malaysiakini reported the Finance Ministry as saying that 1MDB did not receive any loan from Ananda Krishnan to settle its RM2 billion loan payment.
The news portal cited a parliamentary reply from the ministry on the matter to Batu MP Chua Tian Chang, who had asked why the strategic investment firm did not use its fund from the Cayman Islands to pay off its debt.
“Regarding the loan which 1MDB allegedly received from millionaire Ananda Krishnan, the report is not true,” the ministry reportedly stated.
Malaysiakini reported ministry as also saying that 1MDB withdrew its US$2.318 billion (RM8.522 billion) offshore savings in the Cayman Islands in two tranches, the first of which was used to repay debts.
“The first tranche of US$1.215 billion has already been used to pay back loan interest, working capital, and other scheduled commitments.
“A second tranche of US$1.103 billion, is still being kept in foreign currency at BSI Bank Limited Singapore, and will be used to repay several loans in foreign currency scheduled for repayment this year,” the reply reportedly read.
Earlier last month, 1MDB settled a RM2 billion loan payment it owed to local banks, but sources said it needed a loan from Malaysia’s second-richest man Tan Sri T. Ananda Krishnan to do so.
On February 23, 1MDB was reported by the Reuters news service as seeking up to RM3 billion from the Finance Ministry to refinance its debts.
Questions also arose over US$2.32 billion 1MDB had deposited in offshore accounts in the Cayman Islands, after conflicting statements were issued over its “repatriation” and, later on, “redemption”.
After previously saying it would bring all the funds back to Malaysia, 1MDB said it will not repatriate the US$1.103 billion it redeemed from its Cayman Island investments as it would be used to service the firm’s debt interest payments.