Misleading to say 1MDB had to be 'bailed out', says former prime minister Najib Razak

Mr Najib speaking to the media after being questioned at the Malaysian Anti-Corruption Commission in Putrajaya, on May 24, 2018.
Mr Najib speaking to the media after being questioned at the Malaysian Anti-Corruption Commission in Putrajaya, on May 24, 2018.PHOTO: AFP

PETALING JAYA (STAR/ASIA NEWS NETWORK) - It is misleading for Malaysia's Finance Minister to claim that 1Malaysia Development Berhad (1MDB) had to be bailed out, former premier Najib Tun Razak said in a Facebook post late on Friday (May 25).

According to Datuk Seri Najib, Mr Lim Guan Eng alleged that the Finance Ministry, Khazanah and Bank Negara Malaysia had to "bail out" 1MDB debts to the tune of RM7 billion (S$2.3 billion) under the previous government.

"Not only is this misleading, it is a politically-motivated attempt to obscure the facts," he said.

Mr Najib said that all of 1MDB's valuable and strategic real estate assets have been transferred to other companies owned by MOF Inc, in accordance with the recommendations of the Public Accounts Committee (PAC) Report on 1MDB.

"However, although MOF Inc took over the assets, the debt or liabilities of 1MDB remained in the company. Accordingly, the arrangement, as I can confirm, is for MOF Inc to service 1MDB debts, but in return for taking over the assets," said Mr Najib.

Had those assets remained in 1MDB, he said, it could have developed and sold the assets on its own, and used the proceeds to pay the company's debts.

"To fulfil its obligations, MOF can use various methods, including sale of land eg to Bank Negara Malaysia or by collecting debt repayments eg from Khazanah," Mr Najib added.

He said there is nothing wrong with such transactions, as each was approved following the relevant governance frameworks.

He added that it was conducted on an "arm's length" basis which followed the correct laws and procedures.

"Therefore, the question of MOF or BNM or Khazanah bailing out 1MDB does not arise at all. It is in fact downright misleading to make such allegations. MOF Inc took over assets and it must be responsible for the liabilities - that is the only correct way, legally and accounting-wise."

Therefore, said Mr Najib, it is wrong of Lim to only highlight the debts of 1MDB, when he should also inform the public about the assets of 1MDB that have been taken over.