The China Petroleum Pipeline Bureau (CPP) has denied allegations that a loan it had received for pipeline projects in Malaysia had been misappropriated.
This followed allegations that CPP's loan was laundered and used to bailout 1MDB.
"We wish to make it very clear that all funds from Exim Bank were only paid directly to CPP’s bank accounts.
"This is in accordance with the strict anti-money laundering banking rules and regulations and signed legal agreements.
"There were absolutely no funds paid to any third-party Cayman Island-based company and/or companies whatsoever," it said in a statement today.
It added that any allegations to the contrary were "completely false".
Malaysian officials have been reported as saying they believe that a portion of the US$2 billion loan for CPP had been diverted into accounts held by Silk Road Southeast Asia Real Estate Ltd, a China company based in the Cayman Islands.
It was revealed in Parliament on Monday that Silk Road had on Aug 24 last year paid 1MDB 4.25 billion yuan (RM2.7 billion), ostensibly to purchase the state-owned fund's 234 acres of land in Ayer Itam, Penang.
However, Silk Road never received the land it had paid for as the Penang state government imposed a freeze on the property.
The Aug 24 transaction took place just six days before 1MDB paid the first tranche of a US$1.2 billion settlement with Abu Dhabi's International Petroleum Investment Company (IPIC).
CPP is the contractor hired by Suria Strategic Energy Resources Sdn Bhd (SSER) for two gas pipeline projects in Kedah and Sabah.
The SSER project fell under the spotlight when the new Pakatan Harapan government revealed that SSER had paid the pipeline contractor China Petroleum Pipeline Bureau US$2 billion (RM8.13 billion) or 88 percent of the project value even though less than 15 percent of the work had been completed.