Former 1MDB subsidiary had no extra debt since last audit, Parliament told

KUALA LUMPUR, June 10 ― SRC International Sdn Bhd, a former subsidiary of debt-laden sovereign investment fund 1Malaysia Development Berhad (1MDB) did not accumulate any additional debt since its audited financial statement ending March 31 last year, Prime Minister Datuk Seri Najib Razak said today.

Najib who is also finance minister, added that SRC will issue details on the latest status of its liability and debts after releasing its financial statement for the year ending March 31, 2015.

He however did not specify details of previous financial year statements for the company.

“The Ministry of Finance (MOF) took over SRC International Sdn Bhd from 1MDB on February 14 2012.

“The ownership transfer mechanism from 1MDB to the Finance Ministry Incorporated (MKD) was via ‘dividend in specie’ by 1MDB, that paid dividends to MOF in the form of a 100 per cent equity share belonging to SRC amounting to RM1 million,” Najib said in his written reply to Umno MP Datuk Abd Aziz Sheikh Fadzir.

Najib added that the Finance Ministry did not fork out cash payments for the takeover.

The Kulim-Bandar Baharu MP had asked Najib when the Finance Ministry took over SRC International Sdn Bhd from 1MDB and how much was paid for the takeover, as well as the current debt of the company.

In January this year, 1MDB said SRC International was “demerged” from its company in February 2012.

In May, Petaling Jaya Utara MP Tony Pua claimed that SRC International was removed from 1MDB’s books and parked directly under the Ministry of Finance in 2012.

In March before that, PKR MP Rafizi Ramli had declared that he will file a civil suit against the civil service pension fund,Retirement Fund Inc (KWAP) for its allegedly “careless” approval of a government-guaranteed RM4 billion loan to SRC International.

In April, opposition lawmakers questioned the Finance Ministry’s “vague” reply to a question on a RM3.8 billion loaned from KWAP for SRC International.

In a written reply to PKR MP Rafizi Ramli then, the ministry did not specify how RM3.8 billion out of the RM4 billion loaned in 2011 from the civil service retirement fund was spent, except that it had been invested in Indonesia, Mongolia and “some other countries”.