Saying he was not “privy” to such matters, he told reporters to direct the question at 1MDB chairman Irwan Sriregar Abdullah.
“I think all this… IPIC… I suggest you speak with the chairman 1MDB, Tan Sri Irwan Sriregar Abdullah. Because I am not privy to all this discussions, ok? Bye,” Johari said when asked to comment on the possibility of a sovereign default.
On July 31, IPIC had said it had yet to receive payments of US$602.72 million and US$26.02 million that were due to be paid under the consent award and a settlement by the ministry of finance and 1MDB following a dispute over payments between IPIC and 1MDB.
Subsequently, IPIC gave 1MDB an extension of time, and on Aug 11, 1MDB said it had paid US$350 million and that the balance would be paid by end August.
Subsequently, DAP secretary-general Lim Guan Eng had expressed worry that the missed payment could be considered a sovereign default, impacting the country’s credit ratings.
A sovereign default occurs when the government of a country fails to repay debts on time. Most countries try to avoid a sovereign default as it would cost more to borrow money from overseas after such a default.
Earlier, Johari opened the 28th Public Accountants’ Conference at the Equatorial Hotel in Bayan Lepas here today.
On the Penang government’s application for a bridging loan with a Chinese bank to finance a reclamation project, Johari said the application had not landed on the finance ministry’s table yet.
He said there was “no issue” with any entity wanting to get a loan from an overseas bank, but the applicant had to justify why it was needed.
Johari said the applicant must show to his ministry and Bank Negara Malaysia (BNM) that it would be able to repay the loan.
“Whoever borrows from overseas, they must be able to sustain and pay from the business (they are running). Otherwise, we will be tapping into our international reserves.
“We need to make sure that BNM is in the loop of this application (of loans from China).
“Some GLCs, too, want to apply for foreign loans, but they have to go through BNM also.
“They have to explain why they want to tap overseas funds when the domestic (market) has ample liquidity (to get loans),” he said.
Penang was offered by a Chinese bank to help with advance payments to reclaim three islands south of Penang. The reclaimed islands, in turn, will be used to finance the RM27 billion Penang Transport Master Plan. The plan includes roads, highways and light-rail transit routes throughout the state.
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