WSJ wrong again on latest missed payment claim, 1MDB says

1MDB denied the Wall Street Journal’s claim that payments of nearly US$1 billion had not been made to a United Arab Emirates state-owned firm. — File pic
1MDB denied the Wall Street Journal’s claim that payments of nearly US$1 billion had not been made to a United Arab Emirates state-owned firm. — File pic

KUALA LUMPUR, Sept 18 — State-owned investment firm 1Malaysia Development Berhad (1MDB) today denied the latest claim of nearly US$1 billion (RM4.21 billion) in payments allegedly not made to a United Arab Emirates (UAE) state-owned firm, accusing the Wall Street Journal (WSJ) of “malicious insinuations” in its report.

1MDB said in a statement that its audited financial statements dated March 31, 2014 “clearly describe the source of funding and purpose of the payments for the option of termination”, which it explained was structured as a deposit “pending determination of the final settlement amount”.

“1MDB can confirm that pursuant to the payment made by 1MDB, the options were in fact terminated. In fact, 1MDB and its relevant subsidiaries were released and discharged from all agreements, options, covenants, conditions and stipulations on their part under the options and that any rights by any other party towards the options were relinquished and terminated,” the statement read.

Earlier today, WSJ ran a report claiming that International Petroleum Investment Co (IPIC) is questioning a second allegedly missing money transfer amounting to US$993 million that 1MDB said it has paid to the Middle Eastern sovereign fund.

The US-based newspaper quoted sources as saying that 1MDB’s payout was allegedly undocumented.

Citing from a copy of a draft report by the Malaysian Auditor-General that it claimed to have sighted, WSJ pointed out that 1MDB said it made a transfer of nearly US$1 billion to a IPIC unit last November as partial payment for the options to buy a stake in some power assets.

However, the paper said neither the financial records of IPIC, nor its wholly-owned subsidiary Aabar Investments PJSC for 2014 mention the receipt of the money.

1MDB, which reportedly racked up debts and liabilities to the tune of RM42 billion, stressed that it “cannot speak on behalf” of IPIC or Aabar Investments on their accounting arrangements with regards to the alleged missed payments.

The troubled Malaysian firm also criticised the WSJ over the report, claiming that there was nothing in the report to back up its “sensationalist” claims.

“Given the severity of the unproven allegations, the malicious insinuations made and the impact on the 1MDB rationalisation plan, we would have expected at the very least that the Wall Street Journal would have the decency and courage to name its source and/or provide proof.

“This inability to substantiate clearly shows the shallow nature of its assertions and casts serious doubt on whether or not the Wall Street Journal editors themselves believe in the weak story, cobbled together by its reporters,” 1MDB said.

The paper had drawn global attention when it reported in July that nearly US$700 million had been funneled through 1MDB and government companies into the personal bank accounts of Prime Minister Datuk Seri Najib Razak, two months before the tumultuous Election 2013.

Najib has repeatedly denied any misappropriation of funds, while the Malaysian Anti-Corruption Commission stated on August that the money was a donation from the Middle East without going into further detail.

WSJ’s report last week caused another stir when it ran a news piece highlighting IPIC had not received some US$1.4 billion that 1MDB said it had paid, and cited a draft report by the Auditor General on 1MDB as well as a transcript of proceedings held by Parliament’s Public Accounts Committee (PAC) investigating the issue.

1MDB issued a statement on the same day in response to the report, expressing their concern over an alleged leak of PAC hearing information which it believed is an attempt to “prejudice the PAC investigations and deny 1MDB its right to due process as provided for by the laws of Malaysia”.

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