THE Finance Ministry sold more than a billion ringgit’s worth of redeemable shares to Khazanah Nasional Bhd and used the money to pay 1MDB’s debt to Abu Dhabi’s International Petroleum Investment Company (IPIC), Reuters reports.

Quoting two sources, the report said then finance minister Najib Razak had paid the state-owned investor fund with the proceeds of the sale of the shares.

Khazanah was able to confirm that the MoF in August 2017 exercised outstanding redeemable convertible cumulative preference shares amounting to RM1.2 billion, said the report.

But Khazanah did not say what MoF did with the money.

News reports also said the government had used the RM2 billion from a land deal with Bank Negara to pay 1MDB’s debt to IPIC. 

1MDB in December paid the final tranche of a US$1.2 billion debt to IPIC, resolving a dispute that could have been an embarrassment to the Najib government ahead of the general election. 

1MDB’s ability to pay up was then attributed to the hefty premiums Chinese companies were willing to pay for 1MDB’s properties in Pulau Indah in Selangor and Air Itam in Penang.

The finance ministry did not immediately respond to Reuter’s request for comment. – May 24, 2018.