Ipic-1MDB settlement to be borne by Malaysian taxpayers

The settlement reached between Ipic and 1MDB today is a fair deal for Abu Dhabi but a very bad deal for Malaysian taxpayers, says Wong Chen.

Malaysian taxpayers via the Ministry of Finance (MoF) are now exposed to more than US$6bn (RM26.4bn) in payments to Ipic for the financial scandals of 1MDB, where not a single person has been arrested by the Malaysian authorities.

Contrary to what will surely be portrayed in the local government media as a settlement that favours Malaysia’s interests, the announcement by Ipic in the London Stock Exchange today proved otherwise: that Ipic got exactly what it asked for and what it was legally entitled to.

In June 2016, Ipic instituted legal proceedings to recover approximately US$6.5bnn from 1MDB. Reuters reported on the matter on 14 June 2016 and provided the breakdown of the claim: “IPIC is claiming the $3.5 billion bond plus interest that amounts to $4.8 billion, the $1.2 billion loan plus interest, and about $481 million owed to Aabar — adding up to $6.5 billion, a person familiar with the matter told Reuters.”

The settlement announced today is substantially the same as Ipic’s original demand in 2016, save for possibly some minor waiver of interests. Ipic will get their US$1.2bn in two tranches of US$603m each in July 2017 and December 2017.

More importantly, the Ministry of Finance will also undertake to pay all interest and principal payments from the US$3.5bn bond, which now must surely amount to more than US$4.8bn. The settlement however makes no mention of the US$481m owed to Aabar.

While Abu Dhabi has taken proper actions to remove from Ipic and freeze the accounts of Qubaisi and Husseiny, and in addition, arrested Qubaisi, all the people on the Malaysian side responsible for the world’s biggest ever kleptocracy case, remain free from any actions whatsoever by the Malaysian authorities.

This settlement serves to only benefit the infamous Malaysian Official 1, Prime Minister Najib Razak, and his friends. The settlement essentially allows Najib Razak to avoid a trial which would have opened a gigantic can of worms.

Instead of justice and closure, this settlement today further ingrains the culture of corruption and impunity in Malaysia at the expense of the people.

Wong Chen is the member of Parliament for Kelana Jaya.

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