Malaysian fund's US$1.1b from Cayman Islands are 'assets in US dollars': PM Najib

MAY 20, 201510:45 PM

[KUALA LUMPUR] Malaysian Prime Minister Najib Razak said on Wednesday the remaining US$1.1 billion that state investor 1MDB redeemed from its offshore account in the Cayman islands into a Singaporean bank was in US dollar-denominated assets.

Najib had earlier said the assets were in cash.

1MDB, or 1Malaysia Development Bhd, has been dogged by years of controversy over its management of funds and the US$11.6 billion in borrowings it has amassed to finance the purchase of power assets, a burden that has also weighed on the ringgit currency and on Malaysia's sovereign credit rating.

"1MDB has explained that the balance of the investments, which have been redeemed by 1MDB, is in the form of assets in US currency in a bank in Singapore with the purpose of balancing its denominated liability," Najib, who is also the Finance Minister, said in a written parliamentary reply to a question by opposition lawmaker Tony Pua.

Najib, who also chairs 1MDB's board of advisors, told Pua in a March parliamentary reply that the redeemed money was in cash form.

If the collateral is a financial instrument, its value can fluctuate to reflect market value.

1MDB is currently under investigation by the Auditor General's Department.

REUTERS