BY ELIZABETH ZACHARIAH
Published: 12 February 2015 12:02 PM
Former prime minister Tun Dr Mahathir Mohamad speaks during the Malaysian Dilemma forum in Kuala Lumpur. He says debt-heavy strategic investor 1Malaysia Development Berhad would not even exist if he was still leading the country. – The Malaysian Insider pic by Seth Akmal, February 12, 2015.Tun Dr Mahathir Mohamad today said he would not have set up 1Malaysia Development Berhad (1MDB), the debt-heavy state investment vehicle, if he was still leading the nation.
The former prime minister said he was always against the setting up of the company and had been vocal about it.
"We should not have 1MDB at all. It is not a national wealth fund. We have to borrow money for it.
"How can you be rich if you borrow money? If you borrow some money from a chettiar (money lender), would you count yourself rich after receiving the money?" he said in answering a question at a forum in Kuala Lumpur today.
"No, you are poor. You are now indebted to the bank," he said, adding that 1MDB should have only be set up if the government had money to spare."How can you be rich if you borrow money? If you borrow some money from a chettiar (money lender), would you count yourself rich after receiving the money?" he said in answering a question at a forum in Kuala Lumpur today.
"So if you have excess money, then by all means have 1MDB. But if you ask me, I would not have 1MDB if I were still the PM," he said to rousing applause.
1MDB, Malaysia's investment arm, has come under fire for its mismanagement, debts, questionable investments and borrowings.
Since its inception in 2009, the strategic development fund has amassed a whopping RM41.9 billion in debts.
In a press conference later, Dr Mahathir, a strong critic of 1MDB, said it should be investigated by independent auditors.
“This is now a controversy. It must be clarified. So one of the ways… is to have an independent audit of the company.
"Why does it borrow money at such a high interest rate at 5.9%? When I was the prime minister, I borrowed from Japan at 0.7% interest rate that was repayable in 40 years," he said.
The former prime minister also noted that the company had not revealed what it had done with the money it claimed to have redeemed from the Cayman Islands.
"Where is the money? They haven't told us where it is. And if they do have it, why didn't they use it to pay off their debts?
"They wouldn't need to borrow from Ananda to do it," he said, referring to billionaire T. Ananda Krishnan.
1MDB said last month that it has redeemed more than RM4 billion from investments in segregated portfolio companies registered in the Caymans but did not state if the money has been repatriated back to Malaysia.
It was also revealed that Ananda gave out a RM2 billion loan to the strategic investment fund to settle its debt obligations to Maybank and RHB Bank Bhd.
Dr Mahathir said 1MDB had to borrow from the Malaysian businessman as it had no one else to borrow from.
"No one wants to loan money to 1MDB so they had to get it from Ananda.
"But that is not going to solve the problem. They borrow money in order to pay debts. It is the same except that the owner of the debt is different...from the bank to Ananda Krishnan," he added. – February 12, 2015.
