Tony Pua: Najib continues to try shifting 1MDB blame to subsequent ruling govts

297
- Advertisement - [resads_adspot id="2"]

‘Financially illiterate’ Najib slammed for chiding government for not paying for 1MDB’s bonds ahead of maturity date to save on interest.

Datuk Seri Najib Razak is only continuing to make a fool of himself by pleading his 1MDB case in Parliament and trying to shift the blame to the subsequent governments, said Damansara MP Tony Pua.

The DAP National Publicity Secretary said that his latest show came just yesterday (March 3), when Najib questioned why his successors did not pay off 1MDB’s bonds ahead of the maturity date to save on interest costs.

He claimed that the government could have used the funds recovered from Goldman Sachs, the US Department of Justice, Ambank, KPMG and Deloitte to pay 1MDB bonds.

“Najib thinks that redeeming bonds traded in the bond market is like paying off his housing loan with a bank. Except it isn’t, and that’s why it’s called a bond, and not a bank loan.

MP DAP PJ Utara Tony Pua

“If Najib had kept his mouth shut and sought advice first from his former bankers in Goldman Sachs, they would have schooled him that it is not normal for bonds to be redeemed early because it tends to be very costly to do so,” said Pua in a statement today.

Pua added that the likelihood of the government saving interest charges via early redemption is unlikely as if the government attempted to acquire or redeem the entire bond issuance, the premium to be paid will shoot up further.

“Financially, the only time when it could possibly make sense for the government to redeem the bonds early, is if the bonds are trading at a very significant discount in the bond market. Then theoretically, the government could try to buy up the bonds below the face value of the bonds.

“However, in reality, if the market catches on that the government is buying back bonds in the market, then the price of the bonds will shoot up significantly again. Regardless, this possibility is moot, because all of the bonds issued by 1MDB are all trading at a premium to the face value today,” he said.

On March 2, Najib argued in Parliament that not a single sen of public funds has been used by the government to repay the principal amount of 1MDB debts.

He said this is because various entities, including Goldman Sachs, audit firms KPMG and Deloitte, AmBank and the US Department of Justice (DoJ) had returned 1MDB funds totalling RM23 billion to Malaysia.

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz yesterday called Najib’s claims “baseless” saying that the federal government will begin servicing the principal debt once the bonds issued by the sovereign fund and its subsidiaries mature, at least two of them by May this year. The debt servicing will continue to be paid until 2039.

DAP secretary-general and former finance minister Lim Guan Eng also previously said the government has already repaid RM13.3 billion of 1MDB’s debt so far.

He then reiterated yesterday again that not a single sen from taxpayers was used by the government to repay the principal amount of 1MDB debt, despite being disputed by the current and former finance ministers.

Najib said that part of the loan had instead been paid by selling 1MDB’s own assets, which included independent power producer (IPP) companies worth RM10 billion and a plot of land in Penang worth RM2.6 billion. – MMO


Earlier report:

Mar 3, Tony Pua submits motion to refer Najib to Parliament’s Rights and Privileges Committee