Tuesday, May 12, 2015

'Putrajaya may resort to printing more money'

5:46PM May 12, 2015
PKR president Wan Azizah Wan Ismail has warned that Putrajaya may resort to printing money to rescue 1Malaysia Development Berhad (1MDB) after it exhaust funds from government sources.

This comes as reports claim that government-linked entities such as Lembaga Tabung Haji, Retirement Fund Incorporated (KWAP) and Permodalan Nasional Berhad (PNB) have injected funds into the financially troubled 1MDB.

"The eagerness of the prime minister's administration to rescue 1MDB regardless of the rakyat's sensitivities is concerning.

"It is not impossible that they will print more of the ringgit to finance 1MDB's debt after all other of the rakyat's funds have been exhausted," she said in a statement today.

Wan Azizah (photo)said if Putrajaya resorts to this, the value of the ringgit will plummet and the rakyat will bear the brunt, as imported goods becomes costlier.

"I hope Bank Negara Malaysia (BNM) will maintain its professionalism and oppose any action that will cause the depreciation of the ringgit, for the sake of defending the currency's value," she said.

1MDB, a finance ministry-owned entity, is struggling to repay its RM42 billion debt after splurging several hundred millions on overpriced power assets and other business deals.

In March, Prime Minister Najib Abdul Razak, who is also finance minister, finally ordered the auditor-general to probe 1MDB following relentless pressure including from former prime minister Dr Mahathir Mohamad who has demanded the premier to step down.

However, the financial controversy spilled over when Tabung Haji's purchase of 1.56 acre of land from 1MDB was leaked online.

Cronies to benefit

Tabung Haji admitted that RM188.5 million was paid for the Tun Razak Exchange land even though 1MDB had only paid RM 194.1 million when it first bought the entire 70 acre plot from the government for its Tun Razak Exchange and Bandar Malaysia project.

This translates to a purchase of RM2,773 per square foot by TH, compared to 1MDB which bought the land for only RM64 per square foot from the government.

Subsequently, it was reported that KWAP too was planning to buy part of the Tun Razak Exchange land at RM2,300 per square foot.

Today, PKR vice president Rafizi Ramli revealed that PNB had injected RM579 million into 1MDB'ssukuk bonds.

Tabung Haji has also admitted that on top of the controversial land buy, it had also put in RM920.8 million in the same sukuk.

"I regret the government's attitude of using public funds to rescue a failed project by the prime minister which is 1MDB.

"The rakyat's income which has remained stagnant is already being robbed through the Goods and Services Tax, now their savings for the future (in Tabung Haji and KWAP) are also being used at a whim to rescue 1MDB which is only benefiting a few cronies," he said.
~ Malaysiakini

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