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"There Will Be No Need For 1MDB" - Chairman Says Company To Be Closed After Clearing Debts

Previously, PM Najib said the government has been aware of the company's failings.

Cover image via The Straits Times

Malaysia's strategic investment arm 1Malaysia Development Berhad (1MDB) chairman said the company will be closed down after all of its debts are settled

According to New Straits Times, treasury secretary-general and 1MDB's chairman Tan Sri Dr Mohd Irwan Siregar Abdullah said he was confident the company would be able to repay its debts with revenue from the government's mega projects after a press conference at Universiti Malaysia Kelantan (UMK) yesterday. 

The projects include the Tun Razak Exchange (TRX), the East Coast Rail Link (ECRL) and the second Mass Rapid Transit (MRT) project.

Image via TRX

"Soon, residents who own a place in the TRX city will pay rent, and we will also sell land plots of Bandar Malaysia which will be developed with public transport such as high-speed train, ECRL and MRT," Irwan said.

Irwan added that revenue cannot be generated immediately, as that will take more than 10 years from long-term development. 

Nonetheless, Irwan said there will be no need for 1MDB once all its debts are cleared.

Free Malaysia Today reported that the government has been laying the groundwork to shut down 1MDB for quite some time

According to the report, Prime Minister Datuk Seri Najib Tun Razak admitted to "lapses in governance" in 1MDB back in January.

Najib added that the government launched an investigation involving multiple authorities after being aware of 1MDB's failings.

"The company's board was dissolved, its management team changed, and its operations reviewed," he said.

Furthermore, Najib stated that the 1MDB issue had been politically exploited, adding that there was "a concentrated campaign" to sabotage the Malaysian economy.

According to the finance ministry, 1MDB has repaid almost RM3.8 billion of its debts to date

The company paid off almost RM230 million to Affin Bank in 2015. 

In 2016, 1MDB also paid RM950 million to the government, RM2 billion to Marstan Investment NV, and USD150 million to EXIM Bank.

Last October, The Edge reported that the company's debt stood at RM32.5 billion.

What do you think about 1MDB's shutdown? Let us know in the comments below.

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