Guan Eng: Civil action to be taken to get back SRC's loan money

Finance Minister Lim Guan Eng said the government is pursuing civil action to trace the money borrowed by SRC International Sdn Bhd from KWAP in an effort to regain it and pay back some of SRC’s loans. — Picture by Shafwan Zaidon
Finance Minister Lim Guan Eng said the government is pursuing civil action to trace the money borrowed by SRC International Sdn Bhd from KWAP in an effort to regain it and pay back some of SRC’s loans. — Picture by Shafwan Zaidon

KUALA LUMPUR, Sept 4 — The government is pursuing civil action to trace the money borrowed by SRC International Sdn Bhd from the Retirement Fund Incorporated (KWAP) in an effort to regain it and pay back some of SRC’s loans, said Finance Minister Lim Guan Eng.

He said SRC had borrowed RM4 billion from KWAP, with a guarantee from the federal government.

SRC was a subsidiary of 1MDB before being taken over by the ministry, which means its financial liabilities are now fully borne by the federal government.

“Of the RM4 billion borrowed, approximately RM3.6 billion (US$1.1 billion) was moved out of Malaysia to several entities and banks via several off-shore subsidiaries,” Lim said in a statement.

These include US$800 million to the BSI Bank in Switzerland, US$250 million to Julius Baer & Co. Ltd Bank in Hong Kong, and US$60 million to a coal exploration company in Mongolia.

“Seeing as how a large portion of the funds have been used worldwide, the government is taking the necessary steps to obtain as much of the RM4 billion amount as possible.

“As well as pursuing civil action, the government through SRC is cooperating with the relevant authorities to trace the money, as well as co-operating with legal advisors to determine what civil actions can be taken to regain SRC’s assets,” he said.

Lim said the steps being taken to return the money does not include the portion of SRC’s funds amounting to RM42 million, which was allegedly embezzled from the organisation and is the subject of seven criminal charges currently on trial at the High Court in Kuala Lumpur.

“Whatever funds returned to SRC in this endeavour will be used to repay its loan from KWAP. At the same time, this will also reduce the government’s burden to repay back said loan on SRC’s behalf, as well as provide additional allocations for economic development and the rakyat’s welfare,” he said.

In July, the former senior partner of a law firm who acted on behalf of KWAP told the High Court that SRC may end up paying over RM9 billion, as a result of taking the RM4 billion loan in 2011 and 2012.

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