#1MDB Bidas Sikap Suka Menipu @TonyPua

1MDB - Tony Pua keliru mengenai bon-bon yang diterbitkan dan menipu mengenai jaminan kerajaan

Media statement issued by 1Malaysia Development Berhad

Issued on 29 June 2015

For immediate publication

1MDB Response to Incorrect Statements by YB Tony Pua

We refer to online news reports today, quoting various statements attributed to YB Tony Pua, in relation to a binding term sheet agreed between 1MDB and IPIC recently.

1MDB clarifies as below:

1. Neither the Ministry of Finance, nor the Government of Malaysia, have provided guarantees for the recent commercial transaction between 1MDB and IPIC.

2. It is publicly known that IPIC issued guarantees, in 2012,  for the payment of interest and principal on two USD1.75 billion bonds issued by 1MDB, totalling USD3.5 billion of principal and up to USD2 billion of interest. The Government has not guaranteed either of these bonds.

3.  As such, it is irresponsible of YB Tony Pua to suggest that the recent binding term sheet between 1MDB and IPIC, a commercial transaction, has resulted in further guarantee obligations by the Government of Malaysia.  It is public information that the Government has only issued a “letter of support”, and this was for a different USD3.0 billion (approx. RM11.35 billion) bond issued by 1MDB.  In total, the Government has only provided explicit guarantees for RM5.8 billion of 1MDB debt.

4. YB Tony Pua has deliberately misled the public by failing to mention the crucial “and vice versa” clause in relation to the “indemnity”, i.e. the indemnity applies both ways – to IPIC as well as 1MDB – in relation to performance of obligations by the parties.  Such a two-way indemnity is a standard clause in commercial transactions to ensure neither party is “out of pocket” for non-performance by the other. 1MDB confirms that it fully intends to perform its obligations under the binding term sheet.

The binding term sheet executed with IPIC is a key component of the 1MDB rationalisation plan as announced by the Ministry of Finance on 29 May 2015.  The success of this approach has been evidenced by the recent repayment of a RM3.6 billion loan by 1MDB. 

Commercial negotiations are ongoing between 1MDB and IPIC to reach a definitive agreement, which will ultimately result in a reduction of approximately RM16 billion of 1MDB debt.  1MDB fully intends to share further information once a final agreement is reached between the parties.

Thanks