MP SPEAKS The 1Malaysia Development Bhd (1MDB) financial statements for the year ending March 2014 which was filed in October 2014, disclosed that the balance of US$1.23 billion (RM4.07 billion) from its controversial investment in a "segregated portfolio fund" in the Cayman Islands will be received in full "before the end of November 2014".

Deputy Finance Minister Ahmad Maslan has proudly promised that the "investment" funds from Cayman Islands will be fully returned to 1MDB by the end of 2014.

" 1MDB akan membawa balik baki sebanyak 40 peratus lagi pada akhir tahun ini.

Jadi tidak akan wujud dan tuduhan-tuduhan mengatakan wang itu hilang dan sebagainya dituduh oleh pelbagai pihak, perkara itu tidak wujud,

” he said on Nov 6 in Parliament.

However, as of today, a week into the month of January 2015, there has been no trace of these funds returning to Malaysia or to 1MDB.

On Dec 23, 2014, the chairperson of 1MDB, Lodin Wok Kamaruddin had hinted in his statement that 1MDB only "expects to redeem the remaining amount in the coming months", as opposed to what was clearly promised in the 2014 financial report.

This is despite the fact that 1MDB has missed two repayment deadlines for a RM2 billion debt in November and December 2014, as reported by Reuters yesterday.

This RM2 billion itself is part of a rescheduled and restructured debt it couldn’t pay in November 2013.

The Edge Financial Daily even reported that Bank Negara Malaysia has summoned the key executives of 1MDB over the issue and warned them of dire consequences should they fail to meet the next deadline at the end of this month.

The question hence arises as to why the RM4 billion funds from Caymans which was supposed to be "returned" in Nov 2014 anyway, hasn’t been repatriated to assist in alleviating 1MDB’s debt crunch?

Perhaps the deputy finance minister was too quick to dismiss the critics who had questioned the existence of the Cayman funds? Or perhaps the Cayman funds are tied up in "investments" of highly questionable value, which if disposed today will result in massive unbearable losses to 1MDB?

This "delay" in the repatriation of funds is crucial as it not only raises the question of 1MDB as a going concern but also threatens the entire stability of the Malaysian financial system.

The failure of 1MDB to repay just the RM2 billion loan will severely affect the financial health of two of the country’s largest banks – Maybank and RHB Bank who were the biggest lenders to 1MDB for this loan.

Worse, a default in the above loan will automatically trigger a default in the balance of RM40 billion of debt in the books of 1MDB.

Such an outcome will be catastrophic to the Malaysian Government, the entire financial system and of course the ultimate bearer of the brunt, the Malaysian taxpayers.

In the light of such a serious ticking time-bomb, why has our Prime Minister Najib Abdul Razak who is not only the Finance Minister but also the chairperson of the Board of Advisers for 1MDB said absolutely nothing?

Firing the CEO and replacing him with another will not move the elephant in the room.

The silence from Najib is not only deafening, it demolishes any confidence the investment and financial community has in his administration.

TONY PUA is DAP's Petaling Jaya Utara MP and DAP publicity secretary.

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