1MDB: 'Why is the debt too high?' - Khairuddin

1Malaysia Development Berhad (1MDB) debts with local banks that amounted to RM5.037 billion have been viewed too big for a company fully-owned by the Ministry of Finance, in less than five years.

Former Batu Kawan UMNO division vice youth chief Datuk Khairuddin Abu Hassan said, the government should expedite into probing the cause of the accumulated debts and explain the issue which had caused the rakyat’s concerns for the longest time.

“1MDB debts to local banks are totaled at RM5.037 billion as stated by the MOF but the entire debt until March is RM41.9 billion.

“This is a huge amount for a company wholly-owned by the MOF which was established less than five years ago,” he said when contacted by Astro AWANI, here today.

Khairuddin was responding to a written statement by the Prime Minister, Datuk Seri Najib Tun Razak in Parliament today revealed the current amount of 1MDB debts with local banks.

Najib, who is also the Finance Minister said the accumulated debts faced by the Government-owned company until January 2015.

At the same time, Khairuddin also said that the figure does not leave any positive impact after the decision power was granted to 1MDB President and 1MDB Group Executive Director, Arul Kanda Kandasamy.

“If this is the solution method that 1MDB has chosen, what privilege it holds to bring home Arul who is dubbed a renowned banker,” he said.

Prior to this, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said 1MDB had spent a whopping RM600 million from the RM950 million injected by the Government as standby credit before the company launches its IPO, and not a loan.

He explained, 1MDB is expected to recover from its cash flow plaguing the company at the moment at the end of 2015.

Khairuddin also said, Husni’s statement regarding the 1MDB status has caused confusion among the rakyat.

“Before this, Arul said the money paid used to clear Maybank and RHB Capital Bhd debts came from the funds from the Caymans Island investment, so which is it now?,” he asked.

The prime minister had earlier stated that the government had given its commitment in the form of bonds totaled at RM1 million for 1MDB.

Najib explained the commitment has at present, a total value of RM50 billion assets.