The Finance Ministry today only managed to give a vague answer on how RM3.8 billion that its subsidiary company SRC International borrowed from the pensioners fund (KWAP) has been used.

Despite a specific question by Rafizi Ramli (PKR-Pandan) on how the money was spent, the ministry said that RM3.8 billion out of the RM4 billion loaned in 2011 had been invested Indonesia, Mongolia and "some other countries" without being specific.

It said that the money was invested in "natural resources and coal mines".

SRC International's financial statements, meanwhile, listed at least RM3.1 billion of the money under "open ended funds" or Tier 3 in fair value hierarchy as listed by accountants.

This means that the investment details were not made available to the auditor, Rafizi, who is also a chartered accountant, said.

SRC was a subsidiary of the beleaguered 1Malaysia Development Berhad (1MDB) when the money was loaned to them. The money was used to invest in a Mongolian coal and energy company called Gobi Coal and Energe Ltd.

However, the subsidiary was subsequently absorbed as a fully-owned entity of the finance ministry, with the RM4 billion liability removed from 1MDB's books.

The loan had been guaranteed by the federal government.

Rafizi ( left ) said that it is open-ended investments like the one listed for SRC International that caused 1MDB to sit on the huge RM42 billion debt it is currently servicing.

“It is investments such as these that caused 1MDB to face a cash flow problem until they had to delay servicing their loans to the banks,” he said.

“The rakyat deserve to know where the money has been invested in, specifically,” he added.

He urged that the RM4 billion be returned to the pensioners fund immediately.

[More to follow]