Beleaguered state fund 1Malaysia Development Berhad (1MDB) yesterday failed to make a US$602.725 million (S$820 million) payment owed to Abu Dhabi's state investor, which warned of "additional obligations" if the money was not banked in within a "five-business-day cure period".
1MDB said it missed the July 31 deadline because it was awaiting funds after selling off other assets.
The payment was to be the first of two tranches of US$1.2 billion owed to the International Petroleum Investment Company (Ipic).
"1MDB itself is awaiting funds that were due to be received in July 2017," 1MDB said in a statement.
"Due to the need for additional regulatory approvals, the receipt of those funds has been delayed to August 2017."
The firm had previously said the payment would be derived from monetising investment fund units.
The news yesterday followed a string of negative developments involving 1MDB, which was started by Prime Minister Najib Razak in 2009 soon after he became Malaysia's leader. He has been battling allegations that money from the fund had been stolen by him and his associates.
Last year, Mr Najib was cleared of any wrongdoing in the 1MDB scandal by Malaysia's Attorney- General.
Last week, the Prime Minister admitted there were "lapses in governance" in the state fund, but has maintained that government investigations found no wrongdoing, and that 1MDB is undergoing rationalisation to rid itself of its heavy debts.
The fund has sold its power plants and transferred land banks and development projects to be managed directly by the Ministry of Finance, which is headed by Mr Najib.
In the Ipic deal, 1MDB defaulted on its bonds last year, leading the Abu Dhabi fund to file a London court dispute with a claim of US$6.5 billion.
In April, the two funds agreed to resolve part of the dispute, with 1MDB to pay US$1.2 billion in two instalments in July and December.
Ipic yesterday said it had not received two payments of US$602.725 million and US$26.025 million due under the consent award and settlement that was announced in May.
Ipic further said that the dispute settlement involves a "five-business-day cure period", after which both 1MDB and its parent, the Finance Ministry, would be subject to additional obligations.
The Straits Times had on Monday asked 1MDB's chief executive Arul Kanda Kandasamy if the payment would be made by the July 31 deadline.
His response: "That is the plan." He then asked for further questions to be posed via official channels.
