1MDB moves $1.53b from Cayman Islands to bank in Singapore, not Malaysia

MALAYSIA’S state investment agency has transferred US$1.103 billion (S$1.53 billion) in investment proceeds from the Cayman Islands to a bank in Singapore, the Finance Ministry said on Wednesday.

This is to facilitate fund withdrawals as approval from Malaysia’s central bank is needed for transactions exceeding RM50 million (S$18.79 million), the ministry said in a written reply to a question from opposition lawmaker Tony Pua in parliament.

1Malaysia Development Berhad (1MDB), which is owned by the Finance Ministry, is struggling to pay off billions of ringgit in loans.

Its failure to repatriate the money from a joint venture back to Malaysia raises more questions about the joint venture, terminated just after six months, critics say.

In Wednesday’s reply, the ministry, which is helmed by Prime Minister Najib Razak, said that the funds had been fully redeemed and were currently kept in BSI Bank Singapore, a subsidiary of the Swiss bank BSI.

On why the money is being kept in Singapore, it said: “The decision to use a bank in Singapore was to ease fund withdrawals as Bank Negara Malaysia regulations state that its approval is needed for every transaction exceeding RM50 million.”

1MDB’s chief executive Arul Kanda said last month the money would be used to service its debt interest payments. 

Mr Pua, a strident critic of 1MDB, told reporters on Wednesday “there is something very fishy about the money in BSI Singapore”.

“The written reply raises more questions. I do not understand the need to keep the money away. Bank Negara will surely approve if the money is going to be used to service 1MDB’s debts,” he added.

The state investment agency, whose board of advisers is chaired by Datuk Seri Najib, has been mired in controversy since it was revealed last year that it had, over five years, racked up RM42 billion in debt. More than a third of this debt is guaranteed by taxpayers.

The Cabinet last week ordered the Auditor-General to review the company’s books. A high-level task force comprising police officers, public prosecutors and anti-graft commission officials was also set up to investigate if there is any wrongdoing by individuals involved with 1MDB – including the Prime Minister, if necessary.