PENANG, Sept 11 – The Penang government agrees with the questions raised by former prime minister Tun Dr Mahathir Mohamad about the 1Malaysia Development Board (1MDB) and its massive debts. Chief Minister Lim Guan Eng said the Penang government was interested in the issue because 1MDB also bought land in the state. He said the state was also interested to know what was going on with 1MDB. “That is why we agree with Tun Mahathir,” Lim said today, referring to reports that Dr Mahathir had raised questions about the heavy debt and usage of funds at 1MDB.
1MDB’s unit 1MDB RE (Ayer Itam) Sdn Bhd had bought 47.3ha of land in Bandar Air Itam from Farlim Group for RM112.5 million in September last year. The land was sold in three lots at RM110 per square foot. In the run-up to the general election last year, the Penang government had expressed shock when Prime Minister Datuk Seri Najib Razak announced that agreements had been signed through 1MDB for land purchases in Air Putih, Ayer Itam and Paya Terubong where thousands of low-medium cost and affordable homes would be built.
Putrajaya had promised to build 9,999 homes to help people in Penang, where land is scarce and property is generally getting too expensive for most locals to buy. Dr Mahathir had criticised the controversial government-owned investment company started by Prime Minister Datuk Seri Najib Razak for the first time in a blog post yesterday. The former premier had also noted that 1MDB had spent billions of ringgit buying power plants at above-market prices from Genting and Ananda Krishnan. Dr Mahathir had lamented 1MDB’s massive debt of around RM38 billion after just five years of operations as the country’s sovereign wealth fund.
Other questionable issues concerning the fund included the government’s inability to help 1MDB pay its debts, and the transfer of money raised from the issue of debt papers to the Cayman Islands. Lim noted the “debt culture” in the country and that the federal government has by now incurred RM542 billion in debts. He expressed concern that it would be difficult to pay off the huge debt. “We fear in the end the people will have to bear the consequences,” he said.