BANK Negara Malaysia and Khazanah Nasional were under pressure from certain parties to bail out 1Malaysia Development Bhd (1MDB), said Finance Minister Lim Guan Eng.

Lim said the central bank and sovereign fund would not have allowed funds to be used for loan repayments.

“However, there was written authorisation because billions of ringgit was involved.

“If they had refused, their heads would have been on the chopping block,” he said at a press conference at the Finance Ministry.

Lim said that 1MDB was insolvent in 2016 so when payments were made by the federal government, it was clear that it was a bailout.

“Just imagine, this RM7 billion could have been used for the benefit of the ordinary people in Malaysia, instead it was used to pay off one of the largest scandal in history.”

He also said 1MDB’s assets are hard to trace because its chief executive officer Arul Kanda Kandasamy had said that he doesn’t know about them as he was on garden leave.

“So that is something we will continue to look for (1MDB assets) but whether we can get it or not is a different story.

“Because if it is true that it has never existed before, then it will be hard to find the assets.”

Lim also said that MoF will honour 1MDB debts.

“The problem is there is a back to back guarantee by the federal government. We will honour that agreement and we will pay as scheduled.” – May 24, 2018.