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Oh dear, new RM28.63 billion of obligations for 1MDB?

Posted in Malaysian economy and more

These days, 1MDB is not that hot n issue anymore. It is now part of the new government’s issue. Recently, The Straits Times of Singapore reported that 1MDB’s debt obligations could be as high as US$6.9billion (RM28.63 billion) and that Malaysia is NOT aware of it. (Okay, we have debts that we do not know, yet? By the way, RM28.63 billion is HUGE and it’s around 70 percent of total GST collections in 2017. If a condo is RM1 million, this amount is enough to buy 28,630 units and this will clear up whatever unsold condo supply in Kuala Lumpur!). Tony Pua, political secretary to Finance Minister Lim Guan Eng, issued a statement criticising the inaccuracy of the ST report and questioned other reporting by the ST on 1MDB affairs. He said, “I was stunned by the ST’s reporting standards where both the writer and editors failed to read and understand the legal financial statement by IPIC.”  Full report in Edgeprop.my here. 

That ST article was written by correspondent Leslie Lopez. Editor of The Straits Times of Singapore (ST) Warren Fernandez issued a statement saying that it stood by the article. Lopez insisted that the story was accurate and claimed that the Malaysian government was in the dark because they were unable to access documentations. Lopez said,“The London lawyers appointed by the Malaysian government have been instructed to look into the possibility that the notes cited in the IPIC announcement could be tied to 1MDB.” In fact Fernandez said the ST stood by its reporting which was based on “documents and information from highly places and reliable sources.” (Seriously, this is new Malaysia and we should now know everything and be transparent about everything right?)

Now we have Abu Dhabi’s state owned Mubadala Investment Company denying that six bonds totalling US$6.9 billion that it is assuming from its subsidiary International Petroleum Investment Co (IPIC) are connected to 1Malaysia Development Bhd (1MDB). This was in response to a query from The Edge. The six bonds — three in US dollar, two in euro and one in British pound sterling denominations — are worth US$6.89 billion collectively. It (Mubadala) said, “As for the US$6.9 billion, and as per our announcement on the LSE on 12 October, such amount represents the IPIC public bonds that will move to Mubadala Development Company. These bonds were issued as part of a GMTN programme by IPIC and have no connection to 1MDB.” Full article in Edgeprop.my here.  I think we are now waiting for ST’s next response.

written on 18th Oct 2018

Next suggested article:  Oh dear, Budget 2019 is a tightening belt one

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