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Damage is done, says Rafizi on failure to settle IPIC debt

 | August 9, 2017

PKR vice-president Rafizi Ramli says payment delays and extensions given to 1MDB and finance ministry has hurt Malaysia's financial reputation and credibility.

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KUALA LUMPUR: 1MDB’s failure to settle its debt with Abu Dhabi-based International Petroleum Investment Company (IPIC) on time does not bode well for the country’s financial reputation and credibility.

PKR vice-president Rafizi Ramli said that “one way or another” it is very obvious that the country does not have the funds to pay for it.

The Pandan MP said that even if Putrajaya manages to secure more extensions or come up with the funds it will do little to convince international investors.

“The damage is done. Once we failed to pay it after the first deadline, whatever extensions that come after that, the biggest damage has already been done,” he told reporters when met outside court here today.

Yesterday, Reuters reported treasury secretary-general Irwan Serigar Abdullah as saying 1MDB was in talks to get the deadline extended.

Subsequently, according to sources, 1MDB succeeded in getting an extension.

Under an agreement struck in April, as part of arbitration proceedings in London, the scandal-hit 1MDB agreed to pay US$1.2 billion in two instalments to IPIC, with the first payment of about US$600 million to be paid by July 31.

But 1MDB failed to honour its commitment, forcing Abu Dhabi’s sovereign wealth fund to give 1MDB a grace period of five days to make the payment. That deadline expired on Tuesday.

Rafizi went on to express concern that there will be more defaults in payment which he added will further impair the country’s financial standing.

“Let’s face it, if you are IPIC what options would you have? This 1MDB is basically a shell company that owes you significant amount of money totalling billions of ringgit.

“Even if you sue them, at the end of day, the Malaysian government will have to fork out money.”

Rafizi also claimed that at the end of the day, the public will end up paying off debts incurred by 1MDB, despite Putrajaya’s assurance that public money will not be used.

1MDB gets another extension from Abu Dhabi for missed payment

1MDB gets new deadline for IPIC payment

1MDB seeks to delay first payment to IPIC


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