PKR vice-president Rafizi Ramli is concerned that taxpayers will have to foot the US$1.2 billion bill amid reports that a preliminary settlement between 1MDB and Abu Dhabi's International Petroleum Investment Company is imminent.

Singapore's The Straits Times reported that the bulk of the US$1.2 billion would be raised through the sales of "fund units" held by 1MDB subsidiary Brazen Sky Ltd.

Rafizi pointed out that Brazen Sky was a subject of controversy when Prime Minister Najib Abdul Razak claimed the company held US$1.01 billion in cash in Singapore but later clarified it was "fund units".

It is not clear if the fund units exist or are worth the amount claimed as 1MDB's accounts have not been audited since 2015, while audit firm Deloitte has disowned its audit of 1MDB accounts for 2013 and 2014.

In view of this, Rafizi questioned which company would purchase the fund units from Brazen Sky Ltd/1MDB when the value cannot be verified.

"Is the company that will inject US$1.2 billion into 1MDB to pay IPIC a government-linked company?" he asked.

Rafizi said Finance Minister II Johari Abdul Ghani, who is overseeing the resolution of the 1MDB scandal, should address these questions.

He stressed that public funds should not be involved in bailing out 1MDB.

The Straits Times reported that the US$1.2 billion settlement between 1MDB and IPIC would be inked as early as today.

The amount, which includes interest, was an emergency loan IPIC extended to 1MDB when it was struggling to repay its debt in 2015.

The report said 1MDB would also continue to negotiate on a further US$3.5 billion owed to IPIC.

They include payments 1MDB was supposed to make to IPIC but were instead diverted to a bogus company bearing a similar name to IPIC's subsidiary.

It was previously reported that IPIC was seeking US$6.5 billion in compensation and payment from 1MDB.

Putrajaya had also reportedly sought China's aid in the settlement.