By Khairul Khalid
The Malaysian goverment possibly bailed out 1MDB by paying its RM2 billion debt last week, said Pandan MP Rafizi Ramli.
Rafizi Ramli
According to Rafizi, in the last two weeks, the Malaysian government raised funds by issuing two series of Malaysian Treasury Bills (MTB) or short term debts amounting to RM2.1 billion.
“It is an extraordinary amount and almost the same as 1MDB’s debts that were settled last week,” said Rafizi.
“It looks like neither the banks nor Ananda Krishnan rescued 1MDB. It was the Malaysian government.”
The MP says that the MTB numbers are obtained from Bank Negara’s website. Rafizi explains that according to Bank Negara’s data, the funds raised by the government issuing treasury bills were historically much lower.
MTB’s are issued on by Bank Negara on behalf of the government to raise short term funds for the financing of government expenditure, with maturities not exceeding one year.
Rafizi also points out that previous treasury bills issued in January 2015 were only for RM100 million and below, compared the RM2.1 billion that were raised in the last two weeks.
“It would seem that quietly and without the knowledge of the public, the Malaysian government has bailed out 1MDB.
It is extremely dangerous. If we allow manipulations of government cashflow to pay unknown debts, we don’t know how far the government can go. This has to stop,” said Rafizi.
The Pandan MP admits that there may be a legal loophole that is being exploited, allowing for such huge amounts to be raised without regulatory approval.
“It is out of character for the government to do this,” says Rafizi, referring to the RM2.1 billion borrowings.
“These treasury bills are usually used to raise funds for short term cash flow. Larger amounts required by the government are normally obtained by issuing long term bonds, which are usually justified by invesment in specific projects.”
Rafizi explains that IMDB’s much publicised negotiations with Ananda Krishnan to settle those debts probably fell through, due to uncertainties surrounding 1MDB’s involvement in the RM11 billion Jimah East power plant project, which in turn may affect 1MDB’s proposed IPO (initial public offering).
He urges 1MDB to come clean, explain how they settled the RM2 billion debt and if there were any government funds involved.
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