THE settlement reached between the International Petroleum Investment Company (IPIC) and 1Malaysia Development Bhd (1MDB) today is a fair deal for Abu Dhabi but a very bad deal for Malaysian taxpayers.

Malaysian taxpayers via the Ministry of Finance (MoF) are now exposed to more than US$6 billion (RM26.4 billion) in payments to IPIC for the financial scandals of 1MDB, where not a single person has been arrested by the Malaysian authorities.

Contrary to what will surely be portrayed in the local government media as a settlement that favours Malaysia’s interests, the announcement by IPIC in the London Stock Exchange today proved otherwise, that IPIC got exactly what it asked for and what it was legally entitled to.

In June 2016, IPIC instituted legal proceedings to recover approximately US$6.5 billion from 1MDB. Reuters reported on the matter on June 14, 2016 and provided the breakdown of the claim: “IPIC is claiming the US$3.5 billion bond plus interest that amounts to US$4.8 billion, the US$1.2 billion loan plus interest, and about US$481 million owed to Aabar – adding up to US$6.5 billion, a person familiar with the matter told Reuters.”

The settlement announced today is substantially the same as IPIC’s original demand in 2016, save for possibly of some minor waiver of interests.

IPIC will get their US$1.2 billion in two tranches of US$603 million each in July 2017 and December 2017.  More importantly, MoF will also undertake to pay all interest and principal payments from the US$3.5 billion bond which now must surely amount to more than US$4.8 billion. The settlement, however, makes no mention on the US$481 million owed to Aabar. 

While Abu Dhabi has taken proper action to remove from IPIC and freeze the accounts of Mr Qubaisi and Mr Husseiny, and in addition, arrested Mr Qubaisi, all the people on the Malaysian side responsible for the world’s biggest ever kleptocracy case, remain free from any action whatsoever by the Malaysian authorities.

This settlement serves to only benefit the infamous Malaysian Official No. 1, Prime Minister Najib Razak and his friends.

The settlement essentially allows Najib to avoid a trial which would have opened a gigantic can of worms. Instead of justice and closure, this settlement today further ingrains the culture of corruption and impunity in Malaysia at the expense of the people. – April 24, 2017.

* Wong Chen is the Kelana Jaya MP.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.