Lim Guan Eng dismisses Najib’s claims on 1MDB

Finance minister refutes ex-PM's claim that 1MDB was not bailed out by previous government

The Malaysian government has dismissed claims by former premier Najib Razak that the debt-riddled 1MDB was not bailed out with a sum of RM7 billion (S$2.4 billion), with Finance Minister Lim Guan Eng saying yesterday that a further RM5 billion of public funds was allocated to cover the state fund's liabilities.

Mr Lim was responding to Mr Najib's comments in a Facebook post on Friday that there was no 1MDB bailout by the previous government.

Mr Lim, who has been in his job for just a week, described the RM7 billion paid by the Ministry of Finance (MOF) to service 1MDB debt in the past year "as the single largest bailout in history carried out by the Government of Malaysia".

He said in a statement that Mr Najib "could not be more wrong" in construing the payments as "compensation" for the transfer of assets to the MOF.

The public comments by Mr Lim and Mr Najib are being closely watched by Malaysians, as under the previous government, discussions on 1MDB were not allowed and top officials were sacked or transferred out for looking too deeply into its affairs.

The 1MDB scandal is being investigated in at least six countries, with the US Department of Justice alleging that some US$4.5 billion (S$6 billion) was misappropriated.


Under Mr Najib, Malaysia sold some of the 1MDB assets and was paying off its debtors, with the disposal of two prime land banks being the final plank of a rationalisation plan.

Mr Najib had said 1MDB had governance issues but "you cannot just accuse somebody of being a thief or anything unless there is evidence. It's been cleared, there's been no wrongdoing - I stand by it".

Mr Lim yesterday, in rebutting Mr Najib, noted that two land parcels were taken back from 1MDB with RM3.2 billion of debt attached.

"Why should the MOF compensate 1MDB to the tune of tens of billions of ringgit as asserted by Datuk Seri Najib Razak, when 1MDB has hardly carried out any development on the land?" he said.

The landbanks in question are the 28ha Tun Razak Exchange (TRX) financial centre in Kuala Lumpur, and a 197-ha Bandar Malaysia township just south of the capital, earmarked to host the terminus for the High-Speed Rail to Singapore.

"The former Finance and Prime Minister must not forget that these parcels of land were originally sold by the Government to 1MDB at bargain basement prices between 2010 to 2012," Mr Lim added.