KUALA LUMPUR – Claims that the government has not repaid the principal amount of 1MDB’s debts do not arise as these debts have yet to mature, the Dewan Rakyat was told today.
Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said this in reference to claims made by Datuk Seri Najib Razak (Pekan-BN) yesterday that not a single sen of public funds has been used by the government to repay the principal amount.
Tengku Zafrul, however, explained that the country has begun repaying the interest on the debts.
“The allegations that we have not paid the principal debts are baseless since these will only mature later,” he said during Question Time today.
He gave the example of the US$1.75 billion bond (RM7.3 billion) issued by 1MDB Energy Ltd, US$1.75 billion by 1MDB Energy (Langat) Ltd and US$3 billion issued by 1MDB Global Investments Ltd, all of which have a maturity period only beginning later this year.
Tengku Zafrul was responding to a question by Lim Guan Eng (Bagan-PH) who had sought for comment pertaining to the claims made by Najib that the government has not paid a sen of the 1MDB principal debts.
In his debate of the royal address yesterday, Najib had said the government has not been using public funds to repay the principal amount as various other entities have already returned 1MDB-related funds totalling RM23 billion to Malaysia.
“In 2018, the 1MDB debt stood at RM32 billion, and it remained the same from 2019 to 2021,” he had said.
According to Zafrul, based on the latest foreign exchange rate, the Malaysian government still has approximately RM38.8 billion in 1MDB commitments yet to be settled.
This includes a RM32.5 billion in principal amount and RM6.5 billion in interests.
Banks can freeze accounts for suspicious activities
On a separate issue, Tengku Zafrul said banks in Malaysia have the prerogative to freeze the accounts of customers if they discover any suspicious financial activities.
He added that Bank Negara Malaysia has issued guidelines and best practices to assist financial institutions in implementing customer due diligence, profiling customers with risks, identifying financial red flags, and understanding current financial crime trends.
Additionally, Tengku Zafrul said based on the terms and conditions agreed upon during the setting up of accounts, banks can impose restrictions on any customers suspected of being involved in financial crimes.
“Banks can place these restrictions and ensure the money involved is not transferred out while a full assessment is being conducted.”
Among the restrictions include suspending debit and ATM cards as well as internet banking, and closing the account altogether, the latter of which can only be taken after full investigations and following sufficient notice to the account holder.
“In short, ceasing the relationship between a bank and customer is not a requirement under the law, but a business call by the banks and other financial institutions based on their internal risk assessments.”
The minister was responding to Datuk Seri Abdul Azeez Abdul Rahim (Baling-BN) who wanted to know if banks have the power to close the accounts of customers based on suspicious transactions, without a full inquiry into the matter. – The Vibes, March 3, 2022
