More than 40 local and international parties have expressed interest to work with 1MDB to develop its Tun Razak Exchange (TRX) and Bandar Malaysia property portfolio. – Reuters pic, July 18, 2015.
In a statement today, the debt-laden state investment vehicle said the company had to face various "baseless" allegations which included claims of missing money and worthless assets.
"Notwithstanding this early success and the fact that 1MDB is owned 100% by the government of Malaysia, we became the subject of a sustained and unsubstantiated politically motivated campaign by certain opposition politicians and Dr Mahathir, who were in turn supported by certain print and online media outlets.
"These parties not only cast aspersions on 1MDB but used various means to sabotage its day-to-day business, which impacted, among others, a proposed IPO of Edra Global Energy," it said.
1MDB, which has accumulated RM42 billion debts since it was set up in 2009, had planned to list Edra to monetise its power assets but this has been delayed.
Edra owns Tanjong Energy (now known as Powertek Energy Sdn Bhd), has a 75% stake in Genting Sanyen Power (now known as Kuala Langat Power Plant or KLPP) and a 75% stake in the coal-powered Jimah Energy.
All were purchased at a total cost of RM18 billion, which its detractors, led by Dr Mahathir, have accused the company of overpaying.
In a filing to Bursa Malaysia on July 10, TNB said it had acquired 70% of 1MDB's stake in coal-power Jimah East Power Sdn Bhd for RM46.9 million.
News of the purchase even before it was formalised caused TNB's share price to drop.
Two days ago, 1MDB announced it had received indicative, non-binding offers from a number of local and international parties for Edra.
Dr Mahathir, who has been 1MDB's fiercest critic, previously alleged that RM42 billion was missing from 1MDB and that the state firm's financial assets worth RM16 billion were worthless.
1MDB today said it was on track with its rationalisation plan, as reflected by the numerous initiatives under way to turn the debt-laden company around.
It listed the initiatives, which included plans for its real estate and energy arm, Edra.
"Collectively, these tangible actions by 1MDB will significantly reduce debt and ensure the long-term sustainability of our three core assets, namely TRX, Bandar Malaysia and Edra Global Energy," it said in reference to its Tun Razak Exchange (TRX) and Bandar Malaysia property portfolio.
"As reflected by the number of initiatives under way, 1MDB is focused on and making good progress with the implementation of our rationalisation plan," it said.
Last month, 1MDB announced its intention to appoint a real estate consultant to help review expressions of interest received for its land parcels in Air Itam, Penang and Pulau Indah, Selangor.
Through its independent real estate consultant, C H Williams Talhar and Wong, 1MDB received expressions of interest from more than 40 local and international parties to be development partners for its 197ha Bandar Malaysia project.
In addition, it completed the repayment of a US$975 million loan (RM3.6 billion) on June 8 to a syndicate of international bank lenders.
This was part of an agreement with Abu Dhabi's International Petroleum Investment Company (IPIC) that 1MDB said would see a RM16 billion reduction of its debts.
Two months ago, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah presented 1MDB's rationalisation plan to cabinet which will see TRX and Bandar Malaysia being run as separate entities with full autonomy and accountability for their operational and financial performance.
“While options are being pursued with respect to the monetisation of Edra Energy, the Finance Ministry will remain a key shareholder in TRX and Bandar Malaysia, which will raise equity via third party investors.
"Proceeds raised will be used for capital expenditure and to reduce 1MDB’s debt," Husni said in a statement on May 29.
Following the conclusion of its strategic review in February, 1MDB had said the two projects located in central Kuala Lumpur would run as standalone entities but stressed that the ownership will remain with the Finance Ministry.
In addition to the potential sale of land development rights, the projects could enter into profit-sharing joint ventures, it added.
Criticism has been mounting over the Finance Ministry's wholly-owned investment vehicle, established in 2009, which has chalked up debts of up to RM42 billion, backed by Putrajaya.
Scrutiny has grown more intense following Sarawak Report's recent exposes, which piled pressure on Prime Minister Datuk Seri Najib Razak and prompted opposition politicians, current and former Umno leaders, including former prime Dr Mahathir, and anti-graft bodies to demand a thorough investigation into the fund.
1MDB today lamented that it had became the subject of a "sustained and unsubstantiated politically-motivated campaign" by certain opposition politicians as well as Dr Mahathir, who were, it said, supported by certain print and online media outlets.
It said various baseless allegations against the company, as well as various means to sabotage its day-to-day business, had impacted on its planned IPO for Edra.
As 1MDB is currently under probe by the auditor-general, a special task force and the Public Accounts Committee (PAC) into its operations, the company reiterated its full cooperation with the investigators.
- TMI
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