PUTRAJAYA will make interest payments on the debts accumulated by scandal-ridden state investor 1Malaysia Development Berhad (1MDB) due this month, said Finance Minister Lim Guan Eng. 

The government will honour the commitments made by the previous government and not put the country in default, he said.

The interest charge of US$50.3 million (RM209 million) is owing to Abu Dhabi as part of a resettlement package related to the sovereign fund.

“We would definitely pay our dues,” he told reporters on the sideline of the Malaysia: A New Dawn conference in Kuala Lumpur today. 

Lim said it would have been a different case if Barisan Nasional, the previous government, were the ones to be in default.

“But it is the Malaysian government that will be in default and we will not allow the Malaysian government to go into default.”

If the country goes into default, there will be an “automatic downgrade” in the ratings of the country by more than a level, he said.

The Bagan MP said the government will protect the country’s international ratings as well as its financial reputation. 

When asked if there were elements of fraud in relation to the 1MDB contract, Lim said the matter is best left to be handled by the attorney-general. 

It was reported by The Sunday Times that the government is relooking at a financial settlement package that BN entered into with Abu Dhabi on matters related to the sovereign fund. – October 9, 2018.