NAJIB Razak’s administration had sought Bank Negara Malaysia’s help to pay US$500 million (RM2 billion) in 1Malaysia Development Bhd debt, reported The Wall Street Journal, citing people familiar with the matter.

It said the bank bought land from the government for RM2 billion in December last year, reportedly for the construction of a financial-education institution.

1MDB, in the same month, had said it came up with the amount, which was to cover an obligation to an Abu Dhabi state fund, via an “ongoing rationalisation programme”, involving the sale of power plants and land.

Bank Negara Governor Muhammad Ibrahim had said at the time that the bank bought the land out of self interest.

The report said the land sale raises fresh questions about the use of state assets to prop up the controversy-mired 1MDB, which is the subject of investigations by the US and other countries.

Former prime minister Najib did not respond to a request for comments on the deal involving the central bank, and neither did the Finance Ministry.

Attempts by WSJ to reach Muhammad were not successful.

The report said the debt to the Abu Dhabi fund dates back to a 2015 crisis, when 1MDB was verging on default. The Middle Eastern fund had offered an emergency bailout, and the Finance Ministry agreed to repay US$1.2 billion by the end of last year.

Finance Ministry officials recently told Prime Minister Dr Mahathir Mohamad’s Pakatan Harapan government that the US$500 million had gone into a special-purpose vehicle set up by the ministry to repay a portion of the US$1.2 billion owed.

The revelation of the Bank Negara land deal is the latest arising from the 1MDB scandal. Details have flowed out following PH’s win in the May 9 polls, with Dr Mahathir vowing to get to the bottom of the case, which has implicated Najib.

The state investor, which is a brainchild of the former prime minister and founded in 2009, had taken on debts totalling more than US$13 billion, about half of which were via international bonds sold by the Goldman Sachs Group.

At least US$4.5 billion of the money it raised was allegedly used to buy luxury properties in the US, a private jet and a yacht, as well as to finance Hollywood movies.

Following this, the US Department of Justice filed civil asset forfeiture suits in 2016 and last year.

1MDB’s debt problems will worsen starting 2022, when the principal on the bonds sold by Goldman starts coming due. – May 23, 2018.