Ex-Malaysian PM Najib denies 1MDB misappropriated funds from TRX City

View of the The Exchange 106 (formerly TRX Signature Tower) currently under construction in Kuala Lumpur, Malaysia, on June 3, 2018.
View of the The Exchange 106 (formerly TRX Signature Tower) currently under construction in Kuala Lumpur, Malaysia, on June 3, 2018. PHOTO: REUTERS
Malaysia's former prime minister Najib Razak at an interview in Langkawi, Malaysia, on June 19, 2018.
Malaysia's former prime minister Najib Razak at an interview in Langkawi, Malaysia, on June 19, 2018. PHOTO: REUTERS

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Former Malaysian prime minister Najib Razak on Thursday (June 21) denied that state fund 1Malaysia Development Berhad (1MDB) had misappropriated money from TRX City, which owns the Tun Razak Exchange (TRX) development in Kuala Lumpur.

In a Facebook post, he responded to remarks made by Finance Minister Lim Guan Eng earlier in the day that about RM3.1 billion (S$1.05 billion) of government funds were misappropriated from TRX City to pay off the state fund's debts.

 

The former premier said that the take-over of TRX City by Minister of Finance Incorporated (MOF Inc) for a nominal sum of RM1 effective March 31, 2017, was a key step in the broader 1MDB rationalisation plan.

Apart from the 70-acre Tun Razak Exchange, TRX City also owns the 486-acre Bandar Malaysia land and projects.

Najib said that after taking over the two prime assets, MOF Inc then assumed payment of certain 1MDB liabilities from April 1, 2017, in return for the asset transfer.

"YB Lim himself admits that even with a further 'up to' RM2.8 billion injection by MOF Inc, the TRX project will be worth at least RM7.8 billion and show a profit.

"Surely it cannot be called a bail-out if the money is to be used to generate a profit?" Najib said in the Facebook post.

He added that while Lim "conveniently" lumped together Federal Government commitments of RM3.7 billion for both the TRX and Bandar Malaysia projects, he had failed to highlight the significant land asset value contained in both projects, and in particular, the Bandar Malaysia project.

"If properly planned, marketed and developed, the Bandar Malaysia land alone could be worth RM30 billion," he said.

Najib said that no monies from TRX City were misappropriated by 1MDB and as practised by many companies, approximately RM3 billion of inter-company loans were made over time by TRX City to 1MDB.

 
 

He said that all these inter-company loans were repaid by 1MDB effective March 31, 2017, through a combination of cash repayments and a set-off against dividends paid by TRX City to 1MDB.

"These repayments were carried out with the approval of MOF Inc and were properly reviewed and signed off by the auditors of TRXC in the March 31, 2017, financial statements.

"Since the TRXC was owned 100 per cent by 1MDB which was in-turn, owned 100 per cent by MOF, surely 1MDB cannot be stealing RM3 billion from itself to service its own loan?" asked Najib.

He said Lim should not be making factually incorrect statements as part of Pakatan Harapan's "political vengeance" against him and the previous Barisan Nasional government.

"Not only is it unprofessional, it spooks investors in the currency, bond and stock markets. Surely the well being of our economy is much more important than the issuance of politically-motivated statements?" said Najib.

TRX City said on Thursday it will lodge a police report on allegations that funds meant for the TRX development were instead used to repay 1MDB loans.