Economic Report 2021/2022: RM18.2b of 1MDB-linked assets seized, recovered

KUALA LUMPUR (Oct 29): A total of RM18.2 billion worth of assets linked to 1Malaysia Development Bhd (1MDB) have been seized or recovered, and placed in the Assets Recovery Trust Account under the custody of the Accountant-General’s Department, the government said.

It said in its 2022 Fiscal Outlook report that the assets included seized physical assets and cash, as well as cash settlements by related parties with the US Department of Justice, settlement proceeds from financial institutions and other parties such as audit firms, and cash recovered from individuals and companies.

The recovery actions, the report said, consisted of negotiations with related parties, legal proceedings and civil suits, enabling the government to reduce the financial impact from 1MDB’s liabilities on the fiscal position.

“In addition to the settlement proceeds paid to the government, the former arranger of bond issuances for 1MDB, Goldman Sachs, will assist and guarantee a minimum of US$1.4 billion asset recovery,” it said.

“The government will continue to pursue recovery actions to mitigate this risk exposure from 1MDB’s obligations,” added the report.

As of September, the government has paid up to RM12.8 billion for 1MDB’s financial commitments and debt servicing via loans and advances from the government or MOF Inc, amounting to almost RM10 billion as well as utilisation of the trust account.

The trust account has an outstanding balance of RM15.3 billion, which the report said would be sufficient to cover 1MDB’s obligations up to 2022.

“1MDB’s overall outstanding financial obligations, composed of both principal (RM32.2 billion) and interests or profits on the debt (RM7.1 billion), amounted to RM39.3 billion,” the report said.

As at end-June 2021, liabilities relating to 1MDB amounted to RM32 billion, accounting for 2.4% of the government’s total debt and liabilities exposure of RM1.33 trillion, equivalent to 88.1% of GDP.

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