PAS deputy president Tuan Ibrahim Tuan Man said the dispute between 1MDB and International Petroleum Investment Co (IPIC) is far from being settled despite the proposed deal announced this week.

“The dispute between the two are likely to drag on until 2020, when the possibility is 1MDB will need to pay a debt of US$3.5 billion to IPIC, apart from the US$1.2 billion that is promised to be settled this year,” said the PAS leader in a statement.

“This means the total that 1MDB has incurred may possibly exceed US$4.7 billion (RM20.68 billion),” he said.

Tuan Ibrahim said the pertinent question was what would happen to the 1MDB-IPIC issue if the prime ministership changes hands after the next general election, due shortly.

“If 1MDB fails in its negotiations with IPIC, then would the new prime minister simply settle the debt just like that, without exposing what happened to the US$3.5 billion that was paid to Aabar Investments PJS, which IPIC had denied was its subsidiary?” asked Tuan Ibrahim.

ST: Deal rushed over DOJ

Yesterday Singapore's Straits Times reported that 1MDB is expected to ink the agreement with IPIC to settle their dispute very soon.

In its report, the Singapore daily cited sources as saying the agreement would see 1MDB pay IPIC US$1.2 billion by year end to settle a loan and accumulated interest from a purported bailout the IPIC gave 1MDB in July 2015.

Straits Times in another report today cited unnamed sources familiar with the matter saying the 1MDB-IPIC deal had been rushed in order to pre-empt the US forfeiture suits to recover money allegedly laundered there, claimed to have originated from 1MDB.

“[...] after the (IPIC's) 1MDB financial assistance package became a key part of a United States Justice Department (DOJ) probe into alleged money laundering in July last year, both sides were forced to open backdoor channels to get bilateral ties back on track and to work on hammering out a settlement for the dispute, according to financial executives and government officials close to the matter.

“Messy and protracted arbitration over the dispute would have brought into the open serious failings in the management of state-owned entities such as 1MDB, Abu Dhabi's IPIC and its associate concern Aabar Investments, they said,” reported the Singapore daily.

Meanwhile, Tuan Ibrahim also asked if the US$1.2 billion to be paid to IPIC contradicts what 1MDB president Arul Kanda Kandasamy said on May 31, 2015.

At the time, Arul had maintained US$1 billion IPIC had given to 1MDB was to pay for a US$975 million (RM3.6 billion) loan to a group of international banks, and was not a loan.

If it is not a loan (from IPIC), why does 1MDB have to return the said 'investment' together with interest?

“Is this considered the kind of the false news that Prime Minister Najib Razak has been talking about?” he asked.

He questioned if 1MDB has enough funds to pay the IPIC loan.

“If not, where is the BN government going to find funds to pay IPIC, especially if they win the 14th general election?”