YOURSAY The moment gov’t guarantees 1MDB’s debt, it sits on taxpayers’ back.

1MDB: Our money’s not from taxpayers

                    

Kit P: The moment the Malaysian government guaranteed the repayment of a large portion of the funds 1Malaysia Development Bhd (1MDB) borrowed, they became effectively taxpayer's money, regardless even if those funds were originally raised from private sources.

In fact, that was the main method how 1MDB, a company with zero business track record, managed to raise such a large amount of funds in the foreign debt market - it is guaranteed by the Malaysian taxpayers.

Taxpayers are legally liable to pay those government-guaranteed loans if 1MDB fails to do so.

Sarajun Hoda: 1MDB is owned by the Finance Ministry, so it is owned by the rakyat. 1MDB chairman Lodin Wok Kamaruddin should not fool Malaysians by saying it is not taxpayers’ money.

This gives the people of Malaysia the right to question the investments and how the money is spent.

Like all government-linked companies in Malaysia, this too will lose tons of money and the government will use rakyat's money to buy back those losses.

This has happened before and will happen this time too. On what basis were the international funds raised? Who gave the guarantee? What were the assets supporting those guarantee?

Blackknight: Indeed, I’m not fooled. 1MDB is a poor move, full stop.

You don't buy assets at inflated prices with borrowed money and keep re-evaluating these assets to show profit. All of 1MDB assets are unproductive and draining the nation's resources.

Lee Hup: The letter of support for 1MDB fundraising exercise is not an explicit guarantee. Finance Ministry had only given an explicit guarantee amounting to RM5.8 billion.

Even with the RM5.8 billion guarantee, it doesn’t mean 1MDB can get away without settling its debts.

The company has a strong financial foundation, which include 15 power plants of which four are in the country and 11 overseas and its land bank, which consist of plots of land for the Tun Razak Exchange and Bandar Malaysia.

When Putrajaya was build, people accused then prime minister Dr Mahathir Mohamad of wasting money and that the enormous borrowing (via bond issuance and foreign loans) would bankrupt Malaysia.

Construction began in 1995 and it was Malaysia's biggest project and one of Southeast Asia's largest with estimated final cost of US$8.1 billion. Putrajaya was also developed by a separate company called Putrajaya Holdings Sdn Bhd.

But today, all Malaysians are proud of how Putrajaya turned out.

Anonymous_3e86: How good are the assets when they cannot generate cash flow to repay the loans, which have to be rescheduled again?

Senior: I am confused. Not taxpayers’ money, but owned by the Ministry of Finance, and therefore an extension of the people.

    

If 1MDB can’t pay its debts, will the Finance Ministry and by extension the people, pay?

Clearwater: 1MDB director Lodin Wok Kamaruddin, please stop sounding off like a fool defending 1MDB's finances.

Do you think 1MDB can borrow billions in ringgit without taxpayers’ money behind it in the form of government guarantees?

If you have that much faith, why not add your personal guarantee to the loans?

James_3392: Lodin, what are you talking about? TUDM (Air Force base) Sungai Besi and Tun Razak Exchange on Jalan Imbi, are pieces of land not owned by the people of Malaysia?

If our government just sells these two parcels of land to the highest bidder, we would have tens of billions in bank. Instead they give it to 1MDB at bargain basement price and give 1MDB a guarantee for the loan it took. What business is this?

SinceredGuy: Lodin, the banking fraternity is laughing at you now. If it is not taxpayers’ money, remove all government guarantees for the 1MDB debts, and no more sweetheart power deals for MDB without open bidding. Can?

As it is, 1MDB has to borrow to pay the interest, let alone the principal.

RCZ: I can't believe this man. Is he saying that government backed bonds and loans repayable to lenders international or otherwise is not from the country's coffers?

Then who is going to pay? He will? The PM? Fund manager Jho Low?

We will be very glad if the payment does not come from the rakyat. Please answer and confirm this Lodin. Who is liable and who is going to pay back?

RSOH: If you're in such good financial standing, please release Malaysians from the guarantee. From your justifications, you don't need it.

Anticonmen: Yes, if it is not taxpayers' money, then why should the government provide a guarantee for 1MDB?

If the RM7 billion is really kept in the Caymans, then why is it that the auditors could not verify the existence of the amount? Why is it that auditors could not release the audit report for so long?

Anonymous #44199885: If 1MDB's debt obligations were not guaranteed implicitly or explicitly by the government of Malaysia, the rakyat would not be concerned. Any failure on the part of 1MDB will not affect the public finances and the welfare of the rakyat.

But this is not the case. The debt obligations, reportedly of a significant amount, are guaranteed by the government of Malaysia and therefore any failure of 1MDB must be of concern to the rakyat.

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