OPPOSITION parliamentarians have slamed Prime Minister Najib Razak for citing “technical issues”  to justify 1Malaysia Development Bhd’s failure to meet its financial obligations, saying the explanation given in Parliament today had tarnished Malaysia’s reputation and shaken investors’ confidence in the country.

Pokok Sena MP Mahfuz Omar  of PAS said Najib’s justification for 1MDB being unable to pay Abu Dhabi’s International Petroleum Investment Company was misleading as the truth was the troubled state investment firm had no money.

He said 1MDB itself admitted yesterday that it could not pay the US$600 million owed to the Abu Dhabi sovereign wealth fund because it was waiting for funds that was due to it in July.

“This failure is because 1MDB has no money. If it has money, it would not need to claim from other funds, just pay with what funds that are available.

“Becuae of 1MDB’s has financial problems, IPIC had to give it five days to repay its debts,” Mahfuz told a press conference in Parliament today.

He said 1MDB’s failure to meet its financial obligations could cause a downgrade in Malaysia’s credit rating, and have long- and short-term efffects on the economy.

1MDB had, in April, reached an agreement to pay IPIC US$1.2 billion in two instalments.

As part of the agreement, 1MDB and the Finance Ministry will assume responsibility for all future interest and principal payments under two bonds it issued and guaranteed by IPIC, worth US$3.5 billion in total.

The agreement was reached after 1MDB last year defaulted on its obligations to the bonds.

Last year, 1MDB was supposed to have paid IPIC subsidiary Aabar Investments PJS US$3.5 billion, which was  related to a guarantee for a bond placed by Goldman Sachs.

Instead, the money went to the similarly named firm Aabar Investments PJS Ltd, which was registered in the British Virgin Islands (BVI).

IPIC denied any link with the BVI firm, and asked a London court to arbitrate a claim totalling US$6.5 billion.

Kuala Terengganu MP Raja Kamarul Bahrin Shah Raja Ahmad said 1MDB’s claim that it had transferred money into an account owned by a company with a similar name to was an embarassment to Malaysia.

“How could 1MDB mistakenly transfer US$2 billion to (an account of) a company with a similar name?

“If 1MDB cannot source the funds and pay (IPIC), this will erode investors’ confidence and even result in the ringgit weakening further.”

DAP’s Segambut MP Lim Lip Eng said his party would submit an emergency motion under Section 18 of the Standing Orders to debate the matter in Parliament.

He said the question now was where would the government get the funds to pay IPIC RM2.48 billion and RM111 million.

“Will it be from the Goods and Services Tax imposed on the people?”  – August 2, 2017.