The trust managed by TARCian Alumni Association (TAA) will be handed RM40 million by the federal government, which can be used for Tunku Abdul Rahman University College (TAR UC) and its students for this year.
This was announced in a statement today by Finance Minister Lim Guan Eng, who said that the funds would be transferred as soon as the trust is set up.
"This allocation of RM40 million will put to rest lies by irresponsible quarters that (previous announcements) were invalid according to the law.
"(These critics) never explained why the allocation, which benefits TAR UC students, was invalid. However, (the critics) deem the billions stolen from 1MDB to be in no violation of the law.
"Among the recipients of 1MDB funds are political parties such as Umno, MCA, SUPP, Gerakan and MIC and cooperatives controlled by MCA, such as Kojadi, which resulted in their bank accounts being frozen," said Lim.
The RM40 million is 33.33 percent more than the RM30 initially promised.
Meanwhile, Lim reiterated that the trust would continue to receive at least RM30 million in annual funding in the coming years.
He urged critics to provide the TAA some space to fulfil their mandate and prove that they are capable of addressing welfare problems involving TAR UC students.
The federal government has drastically reduced funding for MCA-owned TAR UC on the grounds that public funds should not be used for politically-linked entities.
TAR UC's board is controlled by former MCA leaders.
Lim had repeatedly urged MCA to relinquish control of TAR UC in order for the federal government to resume funding.
However, MCA has refused to do so and claimed that Lim was playing politics with education.