Putrajaya has again insisted it did not guarantee US$3 billion (RM10 billion) in debt for 1Malaysia Development Berhad (1MDB).

This despite a support letter showing the government was prepared to foot any shortfall by the company.

 

Deputy Finance Minister Ahmad Maslan (below) , in a statement today, insisted that the support letter was not a form of debt guarantee.

 

"Under the terms of this letter, should 1MDB not honour their obligations related to this bond, any claims against the government (in addition to 1MDB) is only limited to the terms of the letter, which is not a government guarantee," he said.

 

However, one of the terms of the letter reads: "In the event 1MDB, as shareholder of the Issuer, fails to provide the required funds... Malaysia shall then step in to inject the necessary capital into the Issuer, or make payments to ensure the Issuer's obligation in respect of the debt are fully met".

 

The Issuer, according to the letter published by The Edge Malaysia today, is 1MDB Global Investment Limited, a wholly-owned subsidiary of 1MDB.

Stand by Parliament reply

 

Meanwhile, Ahmad stood by his statement to Parliament on Wednesday that the government is only guaranteeing RM5.8 billion of 1MDB's debt.

 

"I would like to inform that there is no letter that guarantees more than the amount stated. 

 

"The Government did not issue any more guarantees other than the RM5.8 billion for 1MDB or its wholly owned subsidiaries, including for the US$3 billion bonds," he said.

 

On the same day, Petaling Jaya Utara MP Tony Pua (right) had accused the government of telling "half-truths" by claiming that the support letter was not an official debt guarantee.

 

"The letter of support has effectively guaranteed a debt. The difference between a guarantee and a support letter is purely semantics," he had said.

 

1MDB, wholly-owned by the Finance Ministry, has raised concern as its ballooning debt may impact ordinary taxpayers.

 

According to The Edge Malaysia , 1MDB's debt stood at RM41.9 billion as at March this year.

Support letter contradicts gov't on 1MDB debt