KUALA LUMPUR, June 3 (Bernama) — It will take time for 1Malaysia Development Bhd (1MDB) to benefit from its investments in power generation and land assets because these projects are long-term, said Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.
Too much focus, however, has been given by the media on the state strategic investment fund’s debts totalling RM42 billion, he said.
“The RM42 billion has to be seen not merely in the context of debts but also in the context of assets, finance costs and shareholders’ funds,” he said in a special TV1 programme on ‘1MDB: Where is the Money?’ aired here Wednesday night.
“If there are those who claim to RM27 billion had vanished, the banks will be panic and ask (1MDB) to settle the debts,” he said.
1MDB in a statement earlier today said that all information regarding the use of the debts had been reported in audited public accounts from March 31, 2010 to March 31, 2014.
The loans were used to buy power assets and land, financial expenditure, investment funds, and deposits in investment funds, while the surplus cash amounted to RM0.9 billion, totaling RM41.8 billion.
Ahmad Husni said 1MDB, which has a paid-up capital of RM1 million experienced rapid growth in the past six years and has 560 acres of land, but dampened by slow returns, causing it to rely on loans.
He said the listing of Erda Energy on Bursa Malaysia was deferred as its financial statements were delayed, forcing the 1MDB rationalisation plan to be carried out involving the sale of stakes in the ownership of its assets.
“Many people have shown interest in buying 1MDB energy assets,” he said.
Commenting on a portal report linking the involvement of an individual named Jho Low in 1MDB, he said, the individual should not be glamourised as there was no confirmation of his involvement.
“So far, there is no confirmation about transactions with Jho Low because PetroSaudi, the company in joint venture with 1MDB, has made a police report in London denying the portal report,” he said.
Earlier, Ahmad Husni said 1MDB’s investment in PetroSaudi is part of a strategic partnership which has resulted in Prasarana Malaysia Bhd’s recent appointment as operator of the Arafah-Mina Metro System.
He also confirmed that 1MDB President and Chief Executive Officer Arul Kanda Kandasamy could not attend a Public Affairs Committee (PAC) hearing last week due to overseas commitments related to the company’s debt repayment.
“He already had an appointment with BSI Bank Singapore and lending institutions to discuss the repayment of 1MDB’s debts totalling US$1 billion.
“Should an amount of US$1 billion that determines 1MDB’s future be ignored?” he said.
Ahmad Husni also denied that audit firms KPMG and Deloitte had conspired to hide embezzlement alleged to have occurred in 1MDB, adding the appointment of a new audit firm is a normal corporate practice.
He also denied that Prime Minister Datuk Seri Najib Tun Razak has a conflict of interest in being Finance Minister and Chairman of the 1MDB Advisory Board as well.
“We are committed to determining 1MDB’s future direction by further enhancing corporate governance,” he added.