Govt to probe claims China offered to bail out 1MDB for deals


The government will investigate allegations that members of the previous administration discussed deals with China to bail out 1Malaysia Development Bhd (1MDB) in return for projects and the use of Malaysian ports.

Finance Minister Lim Guan Eng said the new government that was elected in May last year is already reviewing the details of several bilateral deals with China for suspected irregularities including corruption.

Lim was reacting to a report in the Wall Street Journal (WSJ) that alleged the previous government made several dubious deals with China on its Belt and Road initiative, including the East Coast Rail Link (ECRL) project, at inflated prices so that some of the funds can be diverted to pay off 1MDB loan obligations.

“We knew that the price was inflated, but whether there was such a deal, I have to check. I would be interested to have a copy of those minutes from WSJ,” Lim said at a press conference in Putrajaya yesterday.

WSJ said it has minutes of the meetings where members of the previous government discussed with Chinese officials the terms for such deals.

Lim said if such minutes exist, the government will pursue the allegations. “I have to refer to any details explicitly said. If it was said in black and white, then it is something we will pursue.”

The WSJ report, which also cited sources within the previous and present government, shed light into a period when 1MDB had maturing loans to service and when several mega projects were awarded to Chinese government-owned companies, funded by Chinese loans.

Economic Affairs Minister Datuk Seri Azmin Ali said he personally does not have the details of the deals mentioned in the report, but confirmed  that the government will investigate the allegations.

“If anyone is responsible for wrongdoings, then certainly actions will be taken,” Azmin said at a separate event in Kuala Lumpur.

“We have given a clear message to all parties including foreign countries that we are here to ensure transparency and accountability. We need the support of the foreign countries to assist the current government with the ongoing investigations.”

Meanwhile, Rembau MP Khairy Jamaluddin, who was a member of the ousted Barisan Nasional government, has denied any knowledge of 1MDB bailout deals with China.

“Explosive allegations that need to be investigated thoroughly. As a former Cabinet member, I can categorically state that the Cabinet was never informed that the China deals were linked to bailing out 1MDB. If there is evidence of that happening, it was without Cabinet approval,” Khairy wrote on his Twitter account.

He is also calling for minutes of any Cabinet meetings where the deals were discussed to be made public to verify WSJ’s claims.

In the report, WSJ said senior Chinese leaders offered in 2016 to help bail out 1MDB that was already under probe in several countries including by the US Department of Justice.

It said Chinese officials told visiting Malaysian delegation that China would use its influence to try to get the US and other countries to drop investigations over allegations that allies of then Prime Minister (PM) Datuk Seri Mohd Najib Razak plundered 1MDB, citing minutes of the meeting.

The report also claimed the Chinese offered to eavesdrop on the homes and offices of WSJ reporters to learn who was leaking the information to them.

In August last year, PM Tun Dr Mahathir Mohamad had deferred the US$20 billion (RM82.24 billion) ECRL project and the natural gas pipeline project in Sabah.

Dr Mahathir said Malaysia has no need for the Chinese-backed projects for the time being, given the country’s difficult financial situation.