Calling Khalid a good friend, the Amanah strategy director questioned however, how he could cavalierly whitewash important concerns that the rakyat have regarding 1MDB.
“It is a major lapse in Khalid’s sense of priorities that he downplayed the shenanigans at 1MDB to date.
“Instead of seeking political opportunities in the ruins of 1MDB, he should have used his credentials to impress on all that the asset rationalisation exercise was a huge bailout,” Dzulkefly said in a statement today.
On Aug 7, Khalid, who is now the independent Bandar Tun Razak MP, joined fellow MPs from PAS in meeting with Arul Kanda, who explained the state-owned company’s rationalisation plan.
“Khalid said he was satisfied that the debt restructuring in 1MDB was making ‘good progress and the issue of bailing out 1MDB is irrelevant’,” Dzulkefly said, adding that after hearing what Khalid had to say, it was time for a rebuttal.
“If the debt restructuring is in good progress, the process of bailing out 1MDB cannot be said to be irrelevant when it is essential to sustaining the debt restructuring.”
Dzulkefly said this was so because the “debt restructuring plan does not deny the existence of a bailout. It is an integral part of it”.
He then elaborated on the three hallmarks of a bailout as follows:
- 1MDB can only arise with the help of the government and its foreign partners.
- It is also able to service interest because the government continues its drip-feed of cash and insertion of credit support into 1MDB.
- Debt holders in 1MDB already had or were given fresh guarantees and indemnities acceptable to them.
“If the rationalisation exercise has to be funded to the extent of new debt and or equity of RM42 billion as suggested by Khalid, then that means it is a bailout to that extent.
“1MDB may well repay its debts eventually but only by straining the cash reserves of the Treasury of Malaysia and weighing down the country’s sovereign risk rating with each new government guarantee or indemnity issued when needed in the rationalisation exercise,” Dzulkefly said.
He criticised Khalid for forgetting to ask Arul about the details of the debt restructuring plan and business plan.
“Instead, he tried to explain that 1MDB’s inability to perform its financial commitments and obligations was due to it being hobbled by accusations of misappropriation and leakages.
“That is just being in denial, if not out rightly despicable,” Dzulkefly said.