1MDB’s total loss estimated at RM39 billion, says anti-graft body

SCANDAL-RIDDEN national investment fund, 1Malaysia Development Berhad (1MDB), has lost an estimated RM39 billion through fraud and mismanagement, said an anti-graft watchdog, most of which is irrecoverable.

The losses, which were revealed in a report by the Centre to Combat Corruption and Cronyism (C4), come on the heels of a March 29 government announcement that the firm has paid off its short-term loans.

The RM39 billion losses, C4 said, were separate from the RM39.8 billion in outstanding debts 1MBD still owed in various bonds.

One of the report’s authors, P. Gunasegaram, said the RM39 billion losses included money that was allegedly stolen and funds wasted through mismanagement.
The breakdown of the RM39 billion losses is:

* RM27 billion overpayment of assets and questionable purchases. This includes overpaying for power plants from local companies and RM7 billion in a dubious venture with a member of Saudi royalty.

Gunasegaram said the US$3.65 billion (RM14 billion) allegedly stolen from 1MDB, as revealed in the July 2016 United States Justice Department civil suit, was hidden in these deals.

* RM 10 billion lost in the mispricing of bonds, of which RM6 billion was siphoned off by under-valuing and re-selling them.

* RM 2 billion lost to overpaying its advisers, notably Goldman Sachs.

1MDB, which is Prime Minister Najib Razak’s brainchild, is at the centre of a graft and money-laundering probe involving six countries, the US, Switzerland, Singapore, the United Kingdom, Hong Kong and Luxembourg.

The DoJ suit said US$681 million (RM2.6 billion) was credited into the accounts of “Malaysia Official No.1” (MO1).

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