Najib’s dilemma: To speak or not to speak on 1MDB, says Pua

DAP’s Tony Pua says former PM Najib Razak is welcome to explain where the RM3 billion has gone if he feels he has been maligned with wrongful facts.

PETALING JAYA: Damansara MP Tony Pua today criticised Najib Razak for his response to claims that over RM3 billion was misappropriated from TRX City Sdn Bhd (TRXC), saying the former prime minister could not avoid answering questions on 1MDB while simultaneously defending allegedly dubious transactions related to the state fund.

Pua said in an interview with Reuters last week, Najib had claimed he knew nothing about the money from 1MDB appearing in his personal bank account.

On May 28, the former prime minister had also said that it would be inappropriate to respond to questions on 1MDB.

However, Pua said, Najib appeared “contradictorily and intimately knowledgeable” on the transactions which took place between 1MDB and its wholly-owned subsidiary, TRXC, when he denied that money from the Tun Razak Exchange (TRX) and Bandar Malaysia projects had been misappropriated by 1MDB.

“Najib must decide between claiming that it is ‘inappropriate’ for him to answer 1MDB questions, as he did on May 28, or constantly attempting to defend the dodgy transactions which have taken place in the 1MDB group,” he said in a statement.

“He cannot on one hand feign ignorance and blame the directors or management of the company, but at the same time demonstrate detailed knowledge of the transactions which have taken place in 1MDB to justify, albeit misleadingly, the shenanigans which have taken place.”

On June 21, Finance Minister Lim Guan Eng said the government would inject up to RM2.8 billion to complete the TRX project, adding that the decision was reached despite more than RM3 billion of government funds being misappropriated from the company by 1MDB.

He said the alternative was to pay RM3.51 billion in compensation claims and leave “an eyesore of an abandoned mega-project in the heart of Kuala Lumpur”.

“In that event, apart from having to pay compensation of RM3.51 billion, the government will also lose the RM3.7 billion transferred earlier to TRXC,” he said.

However, Najib denied that any money had been misappropriated, saying RM3 billion of inter-company loans had been made over time by TRXC to 1MDB.

The former finance minister said these loans were repaid by 1MDB effective March 31 last year, through a combination of cash repayments and a set-off against dividends paid by TRXC to 1MDB.

“These repayments were carried out with the approval of Ministry of Finance Inc and were properly reviewed and signed off by the auditors of TRXC in the March 31, 2017 financial statements.

“Since the TRXC was owned 100% by 1MDB which was, in turn, owned 100% by MOF, surely 1MDB cannot be stealing RM3 billion from itself to service its own loan,” he said.

Pua said if Najib felt that he had been maligned with wrongful facts, the new government would be happy to welcome him back to the finance ministry to explain where the RM3 billion had gone, and if there was any chance that 1MDB would be able to recover the money.

“What is important, however, is not the accounting gobbledygook used to confound Malaysians into confusion and submission.

“What Najib explained was merely how 1MDB and TRXC justified and ratified the accounting irregularities between the two companies.”

The heart of the matter, Pua said, was that more than RM3 billion meant for the development of TRX and Bandar Malaysia had been taken by 1MDB to cover up the state fund’s “shenanigans”, and that as a result of the alleged misappropriation, TRXC was now “severely short of funds” to fulfil its obligations in TRX.

“Had the funds in TRXC been utilised for its projects in a transparent and accountable manner, the company would not have needed to seek the RM2.8 billion additional funding from the finance ministry for TRX in the first place.

“It is precisely because of the misappropriation by 1MDB that the ministry is now forced to step in to rescue the project,” he said.

“The fact that TRX might still be able to eke out a profit does not invalidate the fact that it is a bailout. This is because if not for the misappropriation, it would have meant that TRX could have made an additional RM3 billion in profits.”

TRX, which sits on a 70-acre plot of land in the heart of Kuala Lumpur, has been touted to become a leading centre for international finance and business.

It is one of two key real estate projects under the 1MDB umbrella owned by TRXC, the other being the 486-acre Bandar Malaysia development project.

TRXC has said that it will lodge a police report over the alleged misappropriation of funds meant for the TRX development.

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