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Puad says no double payment in 1MDB-IPIC case
Published:  Apr 25, 2017 1:20 PM
Updated: 2:20 PM

Umno supreme council member Mohd Puad Zarkashi has refuted claims that 1MDB has to make "double payments" to Abu Dhabi's International Petroleum Investment Corporation (IPIC).

Puad also claimed that 1MDB will not assume the principal payments on two bonds, guaranteed by both 1MDB and IPIC, which contradicted statements by both companies.

Puad said this in response to DAP's Petaling Jaya Utara MP Tony Pua, who said the settlement announced by IPIC yesterday implied that 1MDB will pay an additional US$3.5 billion, on top of the US$3.5 billion it had already paid to Aabar BVI, a firm 1MDB claimed posed as IPIC's subsidiary.

"Unlike opposition's allegations, 1MDB will not make another payment of US$3.5 billion to IPIC or pay the principal on the US$3.5 billion worth of bonds," he said in a statement.

Puad is also the director-general of the Information Ministry's Special Affairs Division (Jasa).

'1MDB can sue IPIC'

He also noted that IPIC and 1MDB will hold further negotiations on the payments 1MDB had made to "certain entities" to find a common resolution on how to foot the US$3.5 billion principal payments on the bonds which will mature on 2022.

"If there is no resolution between IPIC and 1MDB, 1MDB has the right to take legal action against IPIC on the payment of US$2.5 billion it made to Aabar BVI, before the bonds mature in 2022," he said.

Puad's statement seems at odds with 1MDB, who yesterday said it "will assume responsibility for all future interest and principal payments for two bonds issued by 1MDB companies due in 2022".

IPIC in a filing with the London Stock Exchange also said that 1MDB and Minister of Finance Inc (MoF Inc) will "assume responsibility for all future interest and principal payments under the two bonds issued".

IPIC said 1MDB will also pay the Abu Dhabi state investment firm US$1.2 billion in two equal payments on July 31 and Dec 31.

The agreement is conditional on the London Court of International Arbitration making a "consent award" by May 31.

Long from over

The filing indicates that the settlement involved only part of the total US$6.5 billion sought by IPIC, the remainder of which is believed to be subject to further negotiations.

"The parties have also agreed to enter into good faith discussions in relation to payments made by 1MDB Group to certain entities," read the filing.

In June 2015, IPIC agreed to loan US$1 billion to 1MDB to cover the interest payments on the bonds, as well as US$3.5 billion to cover repayments on 1MDB debt.

It also forgave an undisclosed amount of debt from 1MDB, in exchange for assets but claimed 1MDB failed to repay the debts to IPIC, prompting the move to arbitration.

The US$6.5 billion claimed by IPIC is for the US$3.5 billion bond plus interest that amounts to US$4.8 billion, the US$1.2 billion loan plus interest, and about US$481 million owed to Aabar, Reuters reported last year.

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