KUALA LUMPUR, June 16 ― The federal government confirmed today that it issued a letter of support for 1Malaysia Development Berhad (1MDB) to secure a US$150 million (RM540 million) loan from Export Import (EXIM) Bank.
Deputy Finance Minister Datuk Chua Tee Yong told the Dewan Rakyat that the loan was approved as it fulfilled requirements laid out by the government-owned development bank, which is mandated to assist Malaysian companies with overseas investments.
“All the terms and conditions were set between the government and EXIM,” he said when responding to the adjournment speech by DAP's Petaling Jaya Utara MP Tony Pua.
Pua, who delivered his speech at 1am, questioned if the letter of support would make Putrajaya obligated to repay the loan in the event 1MDB fails to do so, and why the loan was approved to fund the purchase of a plot of land in Pulau Indah, Selangor from Tadmax Resources Bhd at a cost of RM262 million.
The opposition lawmaker also questioned why the purchase was made at RM21.80 per square foot, nearly three times higher than the price of RM9.93 per square foot when Tadmax bought the land in August 2011, and whether the entire loan amount has been disbursed.
“Seeing as how 1MDB's financial status is in crisis, what is the main reason for the Pulau Indah land purchase? Is the purchase still relevant when 1MDB is currently going through rationalisation to sell off its assets such as its energy contracts and properties?” Pua asked.
Pua claimed that the objective of the EXIM loan was likely two-fold: to increase 1MDB's cash flow and to bail out Tadmax, which has been unable to repay a prior loan from EXIM.
The DAP lawmaker noted that Tadmax is chaired by former Umno treasurer Datuk Seri Abdul Azim Zabidi and is run by Kapar Umno deputy division chief Datuk Faizal Abdullah as the chief executive.
To Pua's claims that 1MDB purchased the Pulau Indah land at an exorbitant rate, Chua said the price was determined by an independent valuer and was less half of the going rate of between RM55 and RM66 per square foot in the area.
Chua, however, said further details cannot be revealed as EXIM is duty bound to keep information on loan agreements and their clients confidential.