1MDB has admitted that it is being bailed out by taxpayers, said a lawmaker, as debate continues to rage over the troubled state investor’s future.

Tony Pua said in 1Malaysia Development Bhd’s reply to him yesterday, the firm claimed it would “receive payments over time” for transferring assets to the government.

Those assets, such as the Bandar Malaysia project, are saddled with massive debts, such as a RM2.4 billion sukuk bond transferred to the Finance Ministry (MoF), the Petaling Jaya Utara MP said.

1MBD surrendered the massive property project to MoF after a RM7.41 billion deal to develop it fell through, he said.

The Public Accounts Committee (PAC) did not recommend the sukuk bond transfer as it was not spent on Bandar Malaysia, said Pua, who is a PAC member.

“Most shockingly, however, as admitted explicitly for the first time by 1MDB in its statement to condemn me, was that 1MDB is expecting to ‘receive payments, over time’ from MoF for the above debt-laden asset transfers.

“In layman terms, it means that not only taxpayers are forced to assume 1MDB’s debt, we bloody fools have to even pay 1MDB to assume these debts!” Pua said in a statement.

He also said the Finance Ministry has had to bail out directly or indirectly 1MDB in its debt dispute with Abu Dhabi’s sovereign fund International Petroleum Investment Company (IPIC).

In August, 1MDB paid IPIC some US$600 million (RM2.5 billion) as part of a deal to settle the dispute.

In a statement directed at Pua yesterday, 1MDB, which is at the centre of a worldwide money-laundering and fraud probe, said it achieved near “break even” on its energy investments and is not an “empty shell”.

1MDB said it will also have a surplus of RM3 billion generated over time after the sale of TRX, Bandar Malaysia, Pulau Indah land and Air Itam land.

“In consideration for the transfer of, among others, TRX, Bandar Malaysia, Pulau Indah land and Air Itam land (to the Ministry of Finance), 1MDB will receive payments, over time.”

These payments will be used to meet the principal and interest on the remaining debt obligations of 1MDB, it said.

These debts total approximately RM32.5 billion at present exchange rates and not RM40 billion as claimed by Pua, 1MDB said.

On October 24, Prime Minister Najib Razak, who once headed 1MDB’s advisory board, said 1MDB “is on track to realise a profit”.

Pua, however, did not back down from his claim that 1MDB is still saddled with RM40 billion debts. – October 27, 2017.