Petaling Jaya Utara MP Tony Pua has reacted with incredulity after Communications and Multimedia Minister Salleh Said Keruak claimed that the government's exposure through 1MDB was a mere RM1 million.

"I sincerely hope that Salleh is merely pretending to be stupid," said Pua in a statement today.

Pua, who have been actively pursuing the government over 1MDB's business activities since 2011, said Salleh's claim that the fund still had RM51 billion in assets showed that the minister was likely misled.

"Unfortunately, Salleh is spinning a story that even the CEO for 1MDB, Arul Kanda, has stopped spinning since a year ago.

"It only goes to prove that he really doesn't know what he is talking about," he said.

Pua said that while it is true that Putrajaya injected only RM1 million into 1MDB, the government has provided direct and indirect guarantees to the tune of RM39.8 billion.

He said the amount, which has been verified by the Auditor-General as disclosed to the Public Accounts Committee (PAC), of which Pua is a member of, included:

  • RM5 billion – 30-year bond guaranteed by the federal government (2009)
     
  • RM0.8 billion – 10-year loan from Social Security Organisation (Socso) guaranteed by the federal government (2010)
     
  • US$3.5 billion – 10-year bond guaranteed by International Petroleum Investment Company (IPIC) but indemnified by Ministry of Finance Inc (2012)
     
  • US$3 billion – 10-year bond backed by a "Letter of Support" signed by the Minister of Finance which effectively guaranteed the debt (2013)
     
  • US$1 billion – Advance by IPIC to 1MDB, indemnified by MOF Inc (2015)
     
  • US$0.23 million – Advance interest payments by IPIC on behalf of 1MDB, indemnified by MOF Inc (2015/6)

Pua said that these guarantees meant that if 1MDB were to default on payments, then Putrajaya has to step in and ordinary tax-payers would end up paying for 1MDB's borrowings.

Moreover, much of the "RM51 billion worth of assets" cited by Salleh had been sold off or, as claimed by several foreign jurisdictions, been siphoned off.

This includes the US$1.83 billion which ended up in the accounts of Good Star Ltd and the US$1.367 billion "deposit" to the "fake" Aabar set up in the British Virgin Islands (BVI) which has since been liquidated among others.

On Salleh's claim that 1MDB was still deemed a "going concern" - an accounting assumption that a company can continue operations for the foreseeable future - Pua said that it was likely that the minister does not understand the term.

"Does he not realise that 1MDB no longer has any income sources despite remaining tens of billions of ringgit in debt?" asked Pua.

Yesterday, Salleh wrote on his blog that 1MDB did not lose RM42 billion and that the government's exposure through 1MDB was only the RM1 million start up capital.

The minister added that the company has RM51 billions worth of assets "plus ongoing development for the next couple of decades".

Salleh used this as justification for his argument that the Bank Bumiputera Finance scandal in the 1980s and Bank Negara's disastrous foray into the forex markets in the 1990s were bigger problems compared to 1MDB.