Govt settles total of RM1.7b in 1MDB interest this year

There are 2 other payments to be made; one due on Nov 11 at RM218m and another in the form of sukuk at RM143.8m

By P PREM KUMAR & ALIFAH ZAINUDDIN

The government has paid a whopping RM1.69 billion in interest on 1Malaysia Development Bhd (1MDB) loans this year alone, including the US$50.3 million (RM208.8 million) interest for bonds issued to 1MDB Energy (Langat) Ltd, a wholly owned subsidiary of the troubled state investment arm.

Finance Minister Lim Guan Eng said the government has no intention to default any international debt obligations made by 1MDB to maintain Malaysia’s sovereign credit rating.

He said there are two other payments to be made; one due on Nov 11 at US$52.41 million and another in the form of sukuk Islamic medium-term notes worth RM143.75 million.

“These are the interest payments and we will continue to make these payments. We will not default the debt obligations because it will affect our international credit ratings,” he told reporters at the Parliament lobby yesterday.

We want to assure bondholders that we will honour these commitments, says Lim (Pic by Muhd Amin Naharul/TMR)

He said the massive debts and scandal incurred by the previous administration have dragged along Malaysia and its people.

“This is the price we have to pay because of the 1MDB scandal. This is not a small amount. The question to be asked is what do we get out of this? The overall scandal involves RM50 billion, and what do we get? We get to be known as a champion of kleptocracy.

“This is a scandal that has hurt Malaysia not only from the financial aspect, but also our reputation. The government will continue to take fiscal steps to handle this issue. On the repayment of 1MDB debts, we will continue in fulfilling our commitments,” he said.

Lim said such a move is to give assurance to 1MDB bondholders. “We want to assure bondholders that we will honour these commitments. At the same time, we want to tell the world that we have liberated Malaysia from this global kleptocracy, we want to move away from that.

“We want to join the community of civilised countries where we respect accountability, transparency and uphold integrity, so that Malaysia is free from corruption.”

Lim also said the government would find its way to clear the debts.

“We have to find the money to pay. It is not fun to be the finance minister when we have to find money to pay for this scandal. People have robbed the country, and we get nothing out of paying these interest payments,” he added.

Lim estimated that the government would have to pay RM50 billion for 1MDB’s borrowings. As of the end of 2017, the government has guaranteed RM38 billion of the troubled state fund’s debts.

Prior to this, Prime Minister Tun Dr Mahathir Mohamad said he is seeking to recover at least 10% of the RM50 billion siphoned from 1MDB, and up to 30% of the amount “if we are lucky”.