1MDB's staunchest critic Tony Pua has accused the firm of pretending to be a profitable company, spending big on corporate social responsibility (CSR) via its mega-borrowings, which it is now unable to service.

The DAP lawmaker was responding to 1MDB which said yesterday it had spent RM690 million through its foundation for worthy causes and none of the money were from stolen sources.

"1MDB's generous spending in CSR appears to set the ultimate benchmark for other companies to emulate. 1MDB’s statement and outsized CSR spending were clearly designed to enhance the perception of the state-owned firm as a benign and benevolent corporation, a stark contrast against its much maligned global reputation," he said in a statement.

"The only problem, and the crucial one, is that 1MDB never generated these cash from its businesses, past and present," he added.

For its "profitable" energy business, Pua said, 1MDB borrowed extensively to acquire them for an overpriced RM12.1 billion.

"The borrowings were so big that the profits from the energy companies were insufficient to even service the interest of the relevant loans in the group, what more the principal. As a result, 1MDB was 'forced' to sell its energy business for RM9.83 billion, suffering a huge loss of RM2.27 billion," he added.

Pua said 1MDB’s real estate business never took off for the years in question and the land 1MDB acquired was alienated to 1MDB by the federal government at bargain basement prices.

"The company sold undeveloped land to Tabung Haji and the Armed Forces Pension Fund (LTAT) group, who were cajoled into buying at astronomical prices," he said.

He added that 1MDB still cannot settle its outstanding debts that remains in excess of RM35 billion.

"As we have discovered via the Swiss Attorney-General Office and the United States Department of Justice, at least US$5 billion had been misappropriated from the 1MDB funds while more than US$730 million of the amount had found its way into the prime minister's personal bank account.

"1MDB wasn’t executing its CSR programmes from its cash pile arising from the company's profits.

"Instead, 1MDB was pretending to be a big profitable company, spending big on CSR via its mega-borrowings which it is now unable to service," he said.

The burden of these loans, Pua claimed, are now dumped squarely on the shoulders of ordinary Malaysians who are forced to bail out 1MDB via the federal government.

"In short, we Malaysians are footing the bill, with interest, the money that 1MDB has so 'generously' spent on us via its CSR programmes," he added.

1MDB is in the process of being wound up after becoming embroiled in an international money-laundering scandal and is the subject of investigation in several countries including US, Switzerland, Singapore and the United Arab Emirates.

At its peak, the government fund had a debt of around RM50 billion. This had since been pared down through the sale of its assets.