Almost RM1b of 1MDB-related funds retrieved by Putrajaya, PSC report shows

The government is expecting the recovery of 1MDB assets to take a lengthy period, as most of them are abroad in countries including Singapore, Switzerland and the United States.  — Reuters pic
The government is expecting the recovery of 1MDB assets to take a lengthy period, as most of them are abroad in countries including Singapore, Switzerland and the United States. — Reuters pic

KUALA LUMPUR, July 17 — The federal government has managed to retrieve nearly RM1 billion in sovereign fund 1Malaysia Development Bhd (1MDB)-related funds including in interests and bank grants, as at May 27.

The Special Parliamentary Select Committee (PSC) on the Budget has revealed that a total of RM918.92 million has been sourced, including in other currencies such as the US dollar, the Singaporean dollar, and the Australian dollar.

Of this figure, RM30.30 million is within the 1MDB Recovery Account, whereas RM888.62 million is within the MOF Recovery Account, under the Finance Ministry.

The government is expecting the recovery of 1MDB assets to take a lengthy period, as most of them are abroad in countries including Singapore, Switzerland and the United States. 

Any decisions related to assets repatriation is still under government-to-government discussion with the countries involved.

Among the main 1MDB assets which have been successfully retrieved from US authorities include the Park Lane Hotel in New York City, and money from Red Granite Pictures, worth US$137 million (RM563.98 million) and US$57 million (RM234.65 million) respectively. 

The proceeds of the sale of the yacht Equanimity, which was reported to have been purchased by Genting Malaysia Berhad for US$126 million (RM527.4 million) was fully received on April 23.

The funds are currently in the Sheriff’s Stakeholder Account for a three-month period for adjustment and the yacht’s maintenance expenditure claims which will be determined by a court order. 

Once these costs have been deducted, the remaining sale proceeds will be deposited into either the 1MDB Recovery Account or the MOF Recovery Account, sometime in the third quarter of the year.

The government will also have to bear 1MDB’s debt obligations due to the financial support rendered to it. These include its guarantee for sukuk, or Islamic bonds, worth RM5 billion, a letter of support issued on March 2013 for bonds worth US$3 billion (RM12.6 billion), and debt obligations from the agreement between 1MDB and the International Petroleum Investment Company (IPIC).

The agreement places 1MDB as the guarantor for its subsidiary companies’ debts, including 1MDB Energy Ltd and 1MDB Energy (Langat) worth US$3.5 billion (RM14.6 billion) or US$1.75 billion (RM7.3 billion) each. 

Due to its financial problems 1MDB had to sell several assets such as Edra Energy and land in Ayer Itam in Penang to fund its debt obligations. Additionally, in 2017 and 2018 the government provided RM8.1 billion in financial assistance, via the Finance Ministry and the Minister of Finance Incorporated, as settlement payments to IPIC and 1MDB’s loans interest payment.

Meanwhile 1MDB’s current assets that have the potential to be developed and reduce the debt burden include the Tun Razak Exchange worth RM1.8 billion, the Bandar Malaysia project worth RM8 billion, Pulau Indah worth RM277 million. Collectively all three are estimated to be worth RM10.07 billion.

* The previous version of this story contained an error which has since been corrected.

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