1MDB makes payment on dollar debt, goes under probe

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1Malaysia Development Bhd (1MDB) has paid $66 million of interest on its 2023 dollar bonds on Monday, the state-owned investment firm said.

President and group executive director Arul Kanda said in an emailed statement that he “can confirm that this payment was made”.

1MDB was cast under the spotlight when it delayed the settlement of  MYR2 billion ($542 million) loan by about three months. The Kuala Lumpur-based firm, set up by the government five years ago to build infrastructure, has drawn criticism from lawmakers for its rising borrowings, which totaled MYR41.9 billion as of March 2014.

The company’s $3 billion of 4.4 per cent notes (due 2023) fell 1.5 cents to 83.8 cents on the dollar, as of 4:30 pm in Hong Kong yesterday, a record low, to yield 7.1 per cent, according to prices compiled by Bloomberg.

The notes were sold to investors at par, or 100 cents on the dollar, in March 2013. 1MDB has $975 million of loans due August 31 and another $70 million maturing September 14, according to Bloomberg data.

1MDB, whose advisory board is headed by Prime Minister Najib Razak, announced plans to dismantle its assets in a statement last month.

In light of that, the firm will not undertake any new investments or projects, but will set up standalone entities for its two major property developments and will raise cash from selling its power business over the next 12 months.

According to Kanda, 1MDB has been the target of “politically motivated” attacks that “could potentially harm the economy.”

Also read: 1MDB calls off $2.4b Islamic bond issue

Under probe

 

Malaysia’s Auditor-General Ambrin Buang will carry out an independent audit of 1MDB that will cover all financial accounts, including previous ones. “We will call everyone that is involved, including all those making allegations against 1MDB, if necessary,” Ambrin told reporters at a media conference in Putrajaya, outside Kuala Lumpur. “If there’s a necessity, we’ll also call the prime minister.”

Ambrin was instructed by Najib to independently verify 1MDB’s accounts last week after the state-owned company and its auditor Deloitte LLP met government officials to address media reports about 1MDB and the use of its funds.

Ambrin said yesterday that he will do “whatever is necessary” to carry out the audit on 1MDB “freely and professionally”, The Edge Financial Daily reported.

However, the precise terms of reference for the audit was still unclear but Ambrin said his mandate was “broad” and based on the statement made by the Prime Minister earlier.

Ambrin said he had met Kanda but declined to disclose who else he would meet for the investigations, or the timeline to produce the report for the Public Accounts Committee.

Separately, the police will also conduct a probe on the investment firm.

Malaysia Inspector-General of Police Khalid Abu Bakar has confirmed that the police are investigating the debt-ridden 1MDB, under a new task force formed. He said the task force, set up several days ago by the Attorney-General (AG), included the Malaysian Anti-Corruption Commission (MACC), the AG’s Chambers and the police. “We are part of the task force set up by the AG. We are investigating those reports lodged,” he told local media.

He added that investigations into 1MDB began the moment reports were lodged with the police.

When asked whether Prime Minister Najib Razak was among those being investigated, Khalid said: “Yes”.

“Every report lodged, we will open investigation. When there is an offence committed, we will proceed with an investigation. But when there is no offence, we will refer to the AG to close investigation. In this case, we are cooperating with MACC and the AG’s Chambers, but no decision has been made so far.”

He added the matter was being investigated for cheating and criminal breach of trust.

The MACC said it would initiate investigations once the Auditor-General’s Department has completed its audit of the company.

Also read:

1MDB energy IPO still possible, to resubmit application by May

1MDB debt: Ananda Krishnan settles $560m, Petronas bond yield impacted

1MDB IPO to be delayed

Tycoon Ananda Krishnan to 1MDB’s rescue?

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.