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KUALA LUMPUR, June 3 — In a bid to silence all speculation over where and how 1 Malaysia Development Berhad (1MDB) allegedly squandered nearly RM42 billion, the firm’s chief executive Arul Kanda Kandasamy provided today a detailed breakdown of what the money was used for.
In a brief statement accompanying a graphical presentation of the breakdown, Arul Kanda pointed out that every single ringgit in the RM41.8 billion it used has been accounted for.
“In recent weeks, there has been much speculation about the use of RM42 billion of debt raised by 1MDB, and more specifically that RM27 billion of debt proceeds are alleged to be ‘lost’ or ‘missing’,” he said, referring to allegations raised previously by former prime minister Tun Dr Mahathir Mohamad.
“We provide a summary of what the RM42 billion debt has been used for, information that is fully disclosed in 1MDB’s audited and publicly available accounts from 31 March 2010 to 31 March 2014.
“We trust this clarification will help to clear any confusion on this matter,” Arul Kanda said.
1MDB, now under investigation for alleged impropriety, has been dogged by controversy over recent months.
Leading the attacks against the firm, a brainchild of Prime Minister Datuk Seri Najib Razak, is Dr Mahathir who has repeatedly demanded answers on the whereabouts of the RM42 billion debt that 1MDB reportedly amassed in the years since its inception in 2009.
In a blog post on April 23, Dr Mahathir attempted to trace how 1MDB had spent its borrowings, listing down, among others, its power deals and land deals.
But in total, Dr Mahathir said 1MDB's power plant projects and land investments only added up to some RM14.7 billion, which he said meant there was approximately RM27 billion left to 1MDB’s RM42 billion borrowing.
“Where is the rest of the money?” he asked.
1MDB is currently under investigation by the Auditor-General and Parliament's Public Accounts Committee.
Last week, at an anticipated Cabinet briefing on a proposal to restructure 1MDB, Second Finance Minister announced that the debt-laden firm will receive RM1 billion from Abu Dhabi's Petroleum Investment Company (IPIC) to repay a US$975 million loan maturing soon.
The minister said the payment secured from IPIC and its subsidiary, Aabar Investments, is part of the rationalisation plan to help the indebted firm meet its loan obligations and reduce its liabilities.
The US$975 million loan is due in August but a consortium of German lenders is reportedly seeking an early settlement due to a breach of covenant in the loan agreement by 1MDB..
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 debt, and most recently cash flow problems that saw it struggle to meet a RM2 billion loan payment.