Breakdown: 1MDB’s RM42 Billion Debts
Last week, Arul Kanda Kandasamy, the CEO of 1Malaysia Development Bhd (1MDB), clarified on how the debt-ridden company spent the RM42 billion.
“We provide a summary of what the RM42 billion debt has been used for, information that is fully disclosed in 1MDB’s audited and publicly available accounts from March 31, 2010, to March 31, 2014.
“We trust this clarification will help to clear any confusion on this matter,” Arul said.
However, according to a report by The Edge Malaysia, the figures given by Arul was merely a breakdown, with no explanation of why 1MDB is in the current financial distress that it is in today.
The company has been under-fire as it is on the verge of collapsing under the heavy debt burden, where its income cannot meet its expenses.
With a net cash flow deficit of RM2.6 billion in financial year 2014 (FY14), 1MDB has continued to borrow to service old debts.
According to Arul’s statement, RM18 billion was spent on the purchase of IPPs while RM15.4 billion was invested into funds such as Brazen Sky and Aabar Investments.
Here is the breakdown of the RM42 billion debt:
Criticism has been mounting over the state investment vehicle, established in 2009, and was backed by Putrajaya.
The auditor-general has been tasked to produce an audit report on 1MDB, with a preliminary report expected to be submitted to the Parliament in June, while the Public Accounts Committee started its investigation into the company on May 19.