KUALA LUMPUR, May 31 — Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah has denied a report claiming Putrajaya will wind up 1Malaysia Development Berhad (1MDB), amid growing confusion over the actual status of the state-owned fund’s investments and assets.

The minister replied in the negative when asked to verify a Bernama report yesterday that 1MDB could be “wound down” following a deal with International Petroleum Investment Company (IPIC) and its Aabar Investments unit, which could relieve the Malaysian firm of RM16 billion in debt.

“Not true,” Husni said in a brief text message to Malay Mail Online, without elaborating further.

In its report, Bernama claimed that the two Abu Dhabi firms – which are expected to extend a US$1 billion payment to 1MDB next month – could take on more of the firm’s debts via additional deals in coming weeks.

It further added that 1MDB will be wound down by next year and its operations transferred to three separate firms.

“[The] deal reached with Abu Dhabi-based IPIC and Aabar will help reduce the debt by RM16 billion and in exchange, 1MDB will provide IPIC and Aabar with a number of financial assets, including units that are held in the company’s BSI Singapore account,” the national newswire said.

The report, however, did not cite any sources nor did it elaborate on what these assets would be aside from the controversial “units” in BSI Bank.

Earlier yesterday, Husni said IPIC and Aabar will pump in US$1 billion to 1MDB for the firm to pay off a US$975 million loan by June 4.

He also said the Tun Razak Exchange and Bandar Malaysia projects will be spun off into separate autonomous firms, but did not state what would happen to 1MDB itself.

The TRX will be built on 70 acres of land sold to 1MDB four years ago for just RM4.5 million or RM64 per square foot.

The yet-to-be-built Bandar Malaysia is located in nearly 500 acres of land in Sungei Besi that was previously occupied by the Royal Malaysian Air Force airbase.

1MDB was incorporated in 2009, after the prime minister announced the decision to turn the TIA state fund into a federal agency.

Since then, 1MDB has been dogged by negative publicity over its finances and a debt pile that has reportedly hit RM42 billion, and most recently cash flow problems that saw it struggle to meet a RM2 billion loan payment.