Malaysian Prime Minister Najib Razak said on Wednesday (02/08) that the scandal-plagued 1Malaysia Development Berhad fund’s failure to make a $600 million payment to Abu Dhabi’s sovereign wealth fund did not mean it could not meet its obligation.
He said the missed payment, which was due on Tuesday, was not expected to affect investor confidence in Malaysia’s economy.
“It is only a technical matter, and not a question of not being able to pay back,” he said in parliament during question time.
Najib, who set up the fund in 2009 to promote economic development, has resisted demands to step down over the last two years following reports that more than $700 million was deposited in his personal bank account.
Najib has denied any wrongdoing. The fund is the subject of money laundering investigations in at least six countries. In civil lawsuits, the US Justice Department alleged that about $4.5 billion has been misappropriated from 1MDB.
Malaysian Second Finance Minister Johari Abdul Ghani was quoted by national newswire Bernama as saying on Wednesday that the missed payment would be handled by 1MDB and not the government.
Abu Dhabi’s Mubadala said in a statement that 1MDB and the Malaysian finance ministry had five days to resolve the non-payment to its unit, International Petroleum Investment Company (IPIC).
1MDB said in a separate statement that it was committed to meeting its obligation to IPIC in August. It did not specify a date.