1MALAYSIA Development Bhd has failed to settle US$602.7 million (RM2.6 billion) with Abu Dhabi’s sovereign wealth fund, three months after announcing the debt settlement.

1MDB was supposed to pay International Petroleum Investment Company by July 31 but missed the deadline, reports Bloomberg.

IPIC is expected to announce the news in London today, the financial portal said, citing sources.

Yesterday, The Malaysian Insight asked Treasury secretary-general Irwan Serigar Abdullah about the payment but he declined to answer.

The relationship between IPIC and 1MDB began in 2012 when the former guaranteed two bonds worth US$1.75 billion each for 1MDB to raise funds for the purchase of power-generation assets. In return, 1MDB was to make collateral payments to IPIC.

However, by the end of 2015, problems arose when IPIC/Aabar Investments and 1MDB could not agree over a sum of missing funds due to IPIC and the Malaysian state investor’s failure to settle a US$1.2 billion loan from Abu Dhabi.

Both sides were unable to reconcile the missing monies with Malaysia insisting that it had repaid US$3.5 billion to IPIC subsidiaries while the later maintained that it did not receive most of the funds.

In May 2016, Abu Dhabi and Malaysia agree to take dispute for private arbitration in London. – August 1, 2017.