malaysia

Ex-NST boss asks finance ministry: Is TNB next to bail out 1MDB?

According to reports, Putrajaya may look to national utilities company Tenaga Nasional Berhad to bailout troubled 1MDB. ― File picAccording to reports, Putrajaya may look to national utilities company Tenaga Nasional Berhad to bailout troubled 1MDB. ― File picKUALA LUMPUR, May 22 ― Veteran newsman Datuk A. Kadir Jasin today raised concerns that Putrajaya may look to national utilities company Tenaga Nasional Berhad (TNB) to bail out troubled state-owned fund 1 Malaysia Development Berhad (1MDB), when tempers have yet to cool over a controversial land deal involving the country's pilgrimage fund.

The former editor-in-chief of English daily New Straits Times said it is “unthinkable” that Prime Minister Datuk Najib Razak would make such a move now, when the federal government is still reeling from an expose revealing that Lembaga Tabung Haji (LTH) had paid nearly RM190 million to 1MDB for 1.5 acres of land in the Tun Razak Exchange.

“Is it true that the MoF is mulling or is already on the verge of nominating Tenaga Nasional Berhad (TNB) as key rescuer of 1MBD and to facilitate the exercise TNB will be taken private?” he said, referring to the Finance Ministry in the latest entry on his blog.

LTH sparked controversy recently when it bought a 1.56-acre plot of land in the Tun Razak Exchange from debt-laden 1MDB for RM188.5 million, 43 times higher than what the state investment fund had purchased it for from the government.

Critics have described the deal as a bailout for 1MDB, which has reportedly accumulated some RM42 billion in debt.

Delving deeper into the TNB issue, Kadir today queried if it were true that TNB and sovereign welath fund Khazanah Nasional Berhad ― which is the controlling shareholder ― are at loggerheads with TNB's board, which he claimed is in favour of the alleged bailout plan.

He stressed that TNB has already had to take over a 2,000-megawatt coal-fired project called 3B after 1MDB could not go ahead with it due to lack of funds.

"But Khazanah sources swore that the national power company would not bail out 1MDB or compensate it for the 3-B takeover.

"The sources told me via SMS: 'We have no intention to take TNB private (prohibitively expensive to begin with) …, secondly TNB and/or Khazanah will not bail out or cover up for 1MDB or its assets. We are, thankfully, not involved, to date at least.'

"We should all make sure that it stays that way. TNB is the biggest company on Bursa Malaysia by way of market capitalisation. It is valued at RM97 billion," Kadir said.

Najib has come under intense pressure of late over a string of controversial deals and decisions made by 1MDB, prompting his predecessor Tun Dr Mahathir Mohamad to lead the charge in demanding that the current prime minister step down.

Among the issues raised include the recent "clarification" over the status of US$1.103 billion (RM3.91 billion) redeemed from 1MDB's Cayman Islands account into a Singapore-based account, which the Finance Ministry said was in the form of assets and not cash as previously claimed by 1MDB chief executive Arul Kanda Kandasamy.

The Retirement Fund Inc (KWAP) also came under fire from opposition lawmakers over a RM4 billion government-guaranteed loan to SRC International Sdn Bhd, a former subsidiary of debt-laden 1MDB.

The Finance Ministry later revealed on Tuesday that pension funds Employees Provident Fund (EPF) and KWAP have invested nearly RM3 billion in 1MDB.

KWAP, which manages pensions for the civil service, is Malaysia’s second-largest pension fund after EPF — a compulsory retirement fund for private sector workers.

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