Investors of the controversial Tun Razak Exchange (TRX) financial district heaved a sigh of relief yesterday (June 21) when Finance Minister Lim Guan Eng announced that the project would be going on. He also mentioned that there was RM3 billion misappropriated by 1Malaysia Development Bhd (1MDB) and encouraged TRX City Sdn Bhd (TRXC), the master developer to lodge a police report.
Here’s what TRXC has to say
In response, TRXC has released a statement saying that they are grateful that the government supports them and said that they will act on the advice of the Finance Minister. They confirmed that they will lodge a police report on the missing funds but recently told The Star that they will do it after gathering sufficient information on the case.
TRXC used to be a subsidiary under 1MDB before it was transferred to the Finance Ministry on March 31, 2017. TRXC chief executive officer Datuk Azmar Talib said, “Currently, we have been instructed to gather enough information on the issue. So, let us gather the evidence first, then we will decide if there is a case or not. After that, we will get further instruction (from the Government).”
Lim said that since 2012, the government had guaranteed borrowings, extended advances, provided transfers and purchased land from TRXC amounting to RM3.69 billion. “Of this RM3.69 billion of transfers, a total of RM3.07 billion were misappropriated by 1MDB, mainly for 1MDB loan repayments. As a result, TRXC does not have enough money to fulfil its obligations as the master developer of TRX,” said Lim.
When asked, Azmar said TRXC did not have anything to do with those transactions. “At TRXC, we have always run our business operations based on best practices. However, previously we were part of the 1MDB group and the decisions were made by the parent company,” he said.
“The management of TRXC dealt with the development of TRX, while 1MDB was responsible for the financial management part. So, anything relating to misappropriation of funds, was beyond us. Guided by our best practices as well as the request from the investors of TRX, we requested TRXC to be moved out of 1MDB to the Finance Ministry because investors do not want to be associated with 1MDB,” he explained.
Former prime minister Dato’ Seri Najib Razak also gave his opinion
Najib has denied that 1MDB had stolen money from TRXC and said that 1MDB had already paid the RM3 billion in loans last year (2017). In his Facebook post, he accused Lim of telling “half truths and outright lies”.
“As practiced by many companies, approximately RM3 billion of inter-company loans were made, over time, by TRXC to 1MDB. All these inter-company were repaid by 1MDB effective 31 March 2017, through a combination of cash repayments and a set-off against dividends paid by TRXC to 1MDB. These repayments were carried out with the approval of MOF Inc and were properly reviewed and signed off by the auditors of TRXC in the 31 March 2017 financial statements,” Najib said.
“Since the TRXC was owned 100% by 1MDB which was in-turn, owned 100% by MOF, surely 1MDB cannot be stealing RM3 billion from itself to service its own loan?” he questioned.
He ends his statement by cautioning the Finance Minister against saying “factually incorrect statements” as he feels that it is part of Pakatan Harapan’s “political vengeance” against him and the previous Barisan Nasional government.
He commented, “Not only is it unprofessional, it spooks investors in the currency, bond and stock markets. Surely the well-being of our economy is much more important than the issuance of politically motivated statements?”
This 1MDB saga just seems to be getting more and more complicated each day! Let’s hope the 1MDB investigative team can get to the bottom of this as soon as possible!
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