Finance minister Tengku Zafrul Aziz addressed the issue in the Dewan Rakyat yesterday after Najib and DAP secretary-general Lim Guan Eng had also subsequently released statements on it.
It also led to Petaling Jaya MP Tony Pua submitting a motion in the Dewan Rakyat to refer Najib to the Rights and Privileges Committee for trying to confuse MPs over the issue.
Pua said it was incorrect of Najib to say that not a single sen of public funds was used to repay 1MDB’s principal amounts as his administration had repaid RM8.8 billion in principal and interest prior to 2018.
FMT takes a look at how this issue has snowballed.
What did Najib say in the Dewan Rakyat?
In his speech on Wednesday, Najib said 1MDB’s debts should not be blamed for the state of the country’s finances, pointing out that no repayments on 1MDB’s principal debts had been made since 2018.
“The reality is that not a single sen of 1MDB’s principal debts has ever been repaid. Since 2018, 1MDB’s debt stood at RM32 billion. In 2019, it was RM32 billion. In 2020, it was RM32 billion. In 2021, it was RM32 billion.”
What did Tengku Zafrul say?
Yesterday, Lim, who is Bagan MP, asked Tengku Zafrul about Najib’s remarks on the repayment of 1MDB’s debts, to which the minister answered: “Our remaining commitment is around RM38 billion. The principal is RM32.3 billion, the interest is RM6.5 billion.
“So claims that we have not paid 1MDB’s principal debts are baseless as the principal debts will not mature for some time.”
Tengku Zafrul also said that Malaysia was servicing the interest on the principal debts.
What is Guan Eng saying now?
Lim subsequently released a statement saying Tengku Zafrul “agrees that it was baseless” for Najib to claim that “not a single sen of public funds has been used by the government to repay 1MDB debts”.
“As a former finance minister, I know that it is not true for Najib to claim that 1MDB’s debts did not damage the country’s finances when Goldman Sachs, audit firms KPMG and Deloitte, Ambank and the US Department of Justice had returned 1MDB funds totalling RM23 billion to Malaysia.
“Clearly, all these payments are insufficient to pay back the total amount of principal and interest for 1MDB debts amounting to RM52 billion, of which the principal amount is RM32 billion.
“The government has repaid RM13.3 billion of the debt so far, with RM38.81 billion still outstanding as of Dec 31 last year, according to the finance ministry.”
What does Najib have to say about all this?
In an almost immediate Facebook post, Najib said Tengku Zafrul had actually confirmed his remarks that not a single sen of the RM32 billion principal debts had been paid, as the debts had yet to mature and that RM6.5 billion in interest had been paid since 2009, when the first 1MDB bond was issued.
Najib said both Pakatan Harapan and the Perikatan Nasional administrations cited 1MDB’s RM32 billion debts as the reason why the country’s finances were in dire straits.
But, he said, neither administration paid a sen of the outstanding RM32 billion principal debts.
For the record, it was reported in 2015 that 1MDB’s debts stood at RM42 billion. Prior to the 14th general eection, 1MDB’s debts stood at RM32 billion.
“The question is why did the PH and PN governments sell many assets, take money from Petronas, Retirement Fund Incorporated (KWAP), the National Trust Fund (KWAN), and Khazanah Nasional, while also increasing the country’s debts by RM320 billion using the excuse of 1MDB’s RM32 billion debt, but not pay a sen of the principal debts?”
Had these principal payments been made earlier, Najib said, the country would have saved on interest payments.
He also questioned why some RM23 billion from settlement agreements and repatriations, including from Goldman Sachs (RM16.4 billion), US Department of Justice (RM3 billion), Ambank (RM2.8 billion), KPMG (RM340 million) and Deloitte (RM324 million), weren’t used to pay off 1MDB’s debts.
Did Najib mislead the house?
This is something the Rights and Privileges Committee will have to determine. Najib seems to imply that not a single sen of 1MDB’s principal debts had been paid after 2018, while Pua says the Pekan MP misled the house by implying that no repayments had ever been made for 1MDB’s principal debts.