KUALA LUMPUR, Nov 3 — The federal opposition said the government should not pump RM1.1 billion into 1MDB as the state-run strategic investment agency has already raised RM5 billion in bonds.
Pakatan Rakyat (PR) lawmakers told reporters today the government had already guaranteed the sukuk issued in 2009 by the “highly-leveraged hedge fund.”
“1MDB is supposed to be self-funding. It raised RM5 billion in bonds backed by the government and another RM5 to 10 billion is expected. Now the government is pumping in RM1.1 billion. Where is it going to?” DAP publicity chief Tony Pua (picture) said.
Under Budget 2012, the finance ministry will pump RM1.11 billion into 1MDB, beginning with RM400 million next year alone.
Deputy Finance Minister Datuk Awang Adek had said in Parliament earlier that 1MDB needed to redevelop the old Sungai Besi airport into a new Bandar Malaysia township.
But PAS research chief Dzulkefly Ahmad said that “1MDB has already been given the land. Surely they can use it to finance the project themselves.”
Pua also called “1MDB a 100 per cent hedge fund” with no capital and financing “all its investments on loans.”
“It has borrowed money on government guarantees and is now using it for political purposes under the guise of corporate social responsibility (CSR) such as sponsoring village chiefs to go on their pilgrimage,” the Petaling Jaya Utara MP said, referring to 1MDB’s RM100 million CSR fund.
1MDB had invested RM3.5 billion into a joint investment vehicle with PetroSaudi International Ltd soon after issuing the RM5 billion Islamic bond in 2009.
Its chief executive Shahrol Halmi said last year that disposal of its investments in the joint venture had resulted in a net profit of RM425 million.
PKR secretary general Saifuddin Nasution said that “if it is profitable, why does it need a further injection of RM1.1 billion?”
“In the 2010 Auditor-General Report, nine GLCs did not pay dividends to the government despite making profits. Now, we are even giving money to them,” the Machang MP said.
Besides the redevelopment of the Sungai Besi airport, 1MDB has been appointed to led various other strategic projects deemed vital to Putrajaya’s plans.
It said last month that it was evaluating a proposal to lead the restructuring of national sewerage company Indah Water Konsortium which is currently RM2 billion in debt.
It is also the master developer for the RM26 billion Kuala Lumpur International Financial District.