A 2016 government report on 1Malaysia Development Berhad (1MDB), made public by the new Malaysian government recently, concluded that the state investment fund was drowning in debt far larger than publicly revealed.
This, perhaps, explained why the previous Najib Razak administration classified the auditor-general's report as an official secret.
The report said the scandal-tainted firm had debt commitments totalling RM74.6 billion (S$25.2 billion), inclusive of interest and borrowing costs, from November 2015 to 2039, posing a risk to government coffers.
The amount is nearly double the RM42 billion debt publicly revealed as at March 2014. The government's former top auditor Ambrin Buang, who signed off on the report, said 1MDB had a poor business model and could not even pay for its borrowings, which meant the government ultimately would have had to intervene to pay off creditors with public funds.
"1MDB's business model was overly reliant on borrowings which burdened the company, and isn't sustainable as it doesn't have sufficient earnings to finance borrowings and cost of operations," the report said.
The firm's rationalisation plan - to reduce debts by selling off assets - still left it in deficit, because its borrowing costs far outgrew the value of its remaining assets, the auditor said. By June 2016, the fund had pared down debts to RM28.21 billion before interest, but its assets had depleted to RM27.01 billion, leaving a shortfall.
RM1.52b Amount 1MDB needed annually for 10 years just to repay its loans, according to calculations by the auditor-general.
"Though the rationalisation plan can reduce the debt burden, the government still needs to help pay off the company's debts in the future if it cannot borrow from financial institutions or others," the report said.
Reports by the auditor-general are routinely made public, but the government in 2016 said the 1MDB report had to be made an official secret so that the Parliament Public Accounts Committee, which was investigating 1MDB's governance, could conduct its proceedings without interference. But the report remained classified after the PAC probe.
1MDB was set up in 2009, soon after Datuk Seri Najib became prime minister. It was meant to focus on investments to spur the country's economic development. Mr Najib was involved in the fund from the outset as chairman of 1MDB's board of advisers, and was minister of finance tasked with overseeing 1MDB.
A young flamboyant businessman, Mr Low Taek Jho, widely described as a Najib associate, was also closely linked to the state investment firm, although he has insisted, according to newswire service Bloomberg, that he was just an informal consultant to 1MDB.
The auditor-general calculated that 1MDB needed an annual cash outlay of at least RM1.52 billion a year for 10 years - from November 2015 to May 2024 - just to repay its loans. In 2016 alone, it faced RM4.88 billion in repayments.
"If 1MDB cannot generate its own sufficient income to pay off its principal commitments and borrowing costs, the government will have to bear these debts," the report warned.
It said that if 1MDB defaulted on its loan repayments in October 2015, the Malaysian government would have been exposed to RM20.3 billion in repayments.
To deal with 1MDB's crippling debts, in November 2015, 1MDB's Edra Global Energy sold its power plants for RM9.83 billion to state-owned China General Nuclear Power Corp. But the price was below the RM12.03 billion it paid when it bought the assets, which meant 1MDB still had to bear the balance of its principal borrowings totalling RM21.93 billion for power plants it no longer owned.
In what was seen as a bailout, Mr Najib's government then injected several pieces of land at very low cost into 1MDB. The firm began developing the Tun Razak Exchange financial centre and the Bandar Malaysia township in Kuala Lumpur.
Mr Najib has denied any wrongdoing over the 1MDB scandal, but admitted lapses in governance at the firm. He is due to be questioned by the Malaysian Anti-Corruption Commission today.