Three questions that 1MDB needs to answer

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KUALA LUMPUR: Three questions arise from the statement by 1MDB following a missed payment to Abu Dhabi based International Petroleum Investment Co (IPIC), according to The Independent of Singapore.

IPIC had said it had not received payments of US$602.72 million and US$26.02 million that were due to be paid under a consent award and its settlement of a debts problem with the ministry of finance and 1MDB. The money was to have been paid by July 31.

In a three-paragraph statement on Tuesday, 1MDB said it had written to IPIC to say that the money would be paid in August.

“1MDB itself is awaiting funds that were due to be received in July 2017. Due to the need for additional regulatory approvals, the receipt of those funds has been delayed to August 2017.

“As these are the funds which will be used to pay IPIC, 1MDB has written to IPIC to inform them of our commitment to meet the obligations, originally due on 31 July 2017, in August 2017,” it said.

It also said that all payments due from 1MDB to IPIC would be made from the “proceeds of the 1MDB rationalisation plan.”

The Independent said the first question was about the regulatory approvals. From whom are these approvals pending? From Bank Negara or from elsewhere, it asked.

The second question, it said, was whether the payments to IPIC would be made from the sale of the energy unit under Edra Global Energy Bhd.

In March 2016, 1MDB said it had sold its power assets under Edra to China General Nuclear Power Corporation and its subsidiaries for RM9.83 billion in cash.

It said: “The SSPA (share sale and purchase agreement) completion marks the conclusion of the Edra monetisation, a significant and tangible milestone of the 1MDB rationalisation plan, as first announced by the Ministry of Finance on May 29, 2015.”

The Independent said since no other actions had been taken in the rationalisation plans – pending the arrival of a new buyer for the Bandar Malaysia project – it was clear the money to pay IPIC would have to come from Edra’s sale.

This, it said, raised the third question: Where is Edra’s money and does 1MDB really need regulatory approvals to receive Edra’s money, which was paid in cash?