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'No fund manager for 1MDB's funds in Caymans raises red flag'
Published:  Mar 17, 2016 12:29 PM
Updated: 7:02 AM

The government's admission that no investment bank was appointed to manage 1MDB's funds in the Cayman Islands raises further suspicion over the nature of the funds, said Petaling Jaya Utara MP Tony Pua.

The government said the funds have been earmarked for a debt swap between 1MDB and the International Petroleum Investment Corporation.

"How can there be 'units' if there is no fund manager?

"1MDB must be the first investor in the world who can hold fund manager-less units creating a brand new class of investment assets!" Pua said in a statement.

He said this also raises suspicion over whether the "investments" parked at the Caymans Islands can be liquidated as planned.

The government in a written parliamentary reply said no investment bank appointed to manage the US$940 million Cayman Islands fund measured in "units".

The government has thus far sidestepped questions on what it means by "units".

Pua said the parliamentary reply yesterday adds another layer of confusion over the Cayman Islands funds.

1MDB CEO Arul Kanda in January last year said it had redeemed in full a US$2.318 billion investment in a Cayman Islands registered fund.

The government later said the funds were repatriated to Singapore due to Bank Negara regulations.

It initially said the funds were repatriated in cash and held at BSI Bank Singapore, but later clarified that it is held in the form of “assets”.

The finance ministry clarified that the assets are measured in “units” but did not clarify what it meant by this.