Malaysian fund's US$1.1 bln from Cayman Islands are 'assets in US dollars': PM Najib

Malaysian Prime Minister Najib Razak said on Wednesday, May 20, 2015, that the remaining US$1.1 billion (S$1.47 billion) that state investor 1MDB redeemed from its offshore account in the Cayman islands into a Singaporean bank was in United States do
Malaysian Prime Minister Najib Razak said on Wednesday, May 20, 2015, that the remaining US$1.1 billion (S$1.47 billion) that state investor 1MDB redeemed from its offshore account in the Cayman islands into a Singaporean bank was in United States dollar-denominated assets. -- PHOTO: REUTERS

KUALA LUMPUR (REUTERS) - Malaysia's prime minister said on Wednesday the remaining US$1.1 billion (S$1.47 billion) that state investor 1MDB redeemed from its offshore account in the Cayman islands into a Singaporean bank was in United States dollar-denominated assets.

Prime Minister Najib Razak had earlier said the assets were in cash.

1MDB, or 1Malaysia Development Bhd, has been dogged by years of controversy over its management of funds and the US$11.6 billion in borrowings it has amassed to finance the purchase of power assets, a burden that has also weighed on the ringgit currency and on Malaysia's sovereign credit rating.

Singapore's Business Times said last week that the US$1.1 billion fund is collateral to a US$975 million syndicated loan to 1MDB. The lenders, led by Deutsche Bank, were worried about the collateral and planned to ask 1MDB to pay up before the loan falls due in less than four months, the report said, citing sources.

"1MDB has explained that the balance of the investments, which have been redeemed by 1MDB, is in the form of assets in US currency in a bank in Singapore with the purpose of balancing its denominated liability,"

Najib, who is also the Finance Minister, said in a written parliamentary reply to a question by opposition lawmaker Tony Pua.

Najib, who also chairs 1MDB's board of advisors, told Pua in a March parliamentary reply that the redeemed money was in cash form.

If the collateral is a financial instrument, its value can fluctuate to reflect market value.

1MDB is currently under investigation by the Auditor General's Department.