KWAP said that its RM4 billion loan to for1MDB subsidiary SRC International was given with a government guarantee

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KWAP CEO Datuk Wan Kamaruzaman Wan Ahmad speaking to reporters on the sidelines of the Invest Malaysia forum, April 12, 2016. ― Picture by Mayuri Mei Lin

‘No issue’ over RM4b loan to SRC, KWAP CEO says

MALAYMAILONLINE

KUALA LUMPUR, April 12 ― The Retirement Fund Inc (KWAP) said today that its RM4 billion loan to former 1Malaysia Development Berhad (1MDB) subsidiary SRC International is a non-issue as the loan was given with a government guarantee.

KWAP chief executive officer Datuk Wan Kamaruzaman Wan Ahmad said although he did not know how the loan was used, he was not concerned about repayment as the company has been servicing its interest obligations regularly.

“This is the thing because we have safeguarded KWAP’s interest by getting the government guarantee, and a government guarantee is the highest guarantee so we have no issue.

“At the moment they are servicing the interest payments regularly so we have no issues,” he said when met on the sidelines of the Invest Malaysia forum today.

He explained that the loan was given out in two tranches of RM2 billion each, once in 2011 and once in 2012, and is due for settlement in 10 years.

He added that SRC International is only required to make interest payments for the first five years, followed by both interest and principal payments in the subsequent five years.

The Business Times reported in May 2014 that KWAP, Malaysia’s second-biggest pension fund, had lent RM4 billion to then-1MDB subsidiary SRC International in 2011 to buy coal mines from Gobi Coal & Energy.

Opposition lawmakers have since been demanding answers from Putrajaya on how the money had been spent.

The Malaysian Anti-Corruption Commission later opened an investigation on the matter and the Attorney-General, upon receiving the agency’s probe papers last December, cleared Datuk Seri Najib Razak of all wrongdoing in January, saying the prime minister never used his position to approve a government guarantee for the loan.

Last Wednesday, Najib, who is also finance minister, said in a parliamentary reply that details on the loan cannot be revealed just yet as it has not been adequately audited.

Raub MP Datuk Mohd Ariff Sabri had asked the finance minister to state where the remainder of the RM4 billion loan is after RM10 million from the sum was allegedly used for a Mongolian coal mine.