The Edge reported current 1MDB director Afidah Azwa Abdul Aziz, 49, who is part of the finance ministry’s strategic investments division, as saying this in her testimony in 1MDB’s US$6.59 billion lawsuit (RM28.8 billion) against its former CEO Arul Kanda Kandasamy and board chairman Irwan Serigar Abdullah.
When questioned by Arul’s lawyer Sanjay Mohan, she said RM313.81 million had been logged as operational expenses.
Sanjay: Does 1MDB still have businesses or operations that it still has these many expenses?
Afidah: No, this was for legal costs.
Sanjay: Over RM300 million for legal fees? Is that right?
Afidah: 1MDB is in the process of recovering its assets.
Sanjay: So, the operational expenses to recover the assets is RM300 million?
Afidah: Yes.
Afidah said the same period also saw 1MDB spend RM24.66 billion on the interest and repayment of the bonds it issued as well as the loans it took.
She said the bulk of the sum spent was to pay off the principal and interest on the US$1.75 billion 1MDB Energy (Langat) Ltd and US$1.75 billion 1MDB Energy Ltd bonds, which matured in 2022, and a US$3 billion 1MDB Global Investment Ltd bond that matured in 2023.
Part of the money was also used for coupon payments on an Islamic Medium Term Note (IMTN) or sukuk that will mature on May 27, 2039.
Afidah said the money came from the 1MDB Assets Recovery Trust Account, where funds from 1MDB’s various settlements with Goldman Sachs, Abu Dhabi’s International Petroleum Investment Co (IPIC), KPMG and Deloitte were channelled to.
She said that as of Aug 31, 2024, the account had received RM27.166 billion from the government’s recovery of SRC International and 1MDB assets.
Both Sanjay and Irwan’s lawyer Mavin Thillainathan observed that there was a surplus of a little over RM3 billion from what 1MDB had spent, compared with what had been recovered so far.
However, Afidah said what 1MDB lost was more than the amount recovered to date.
Mavin then asked her about Arul Kanda’s role in the debt accrued by 1MDB, saying most of it was accumulated before Arul Kanda and Irwan joined the company.
Mavin: If both of them came in and investigated the past transactions, would it have made a difference on the sum and interests that needed to be paid back?
Afidah: Yes, maybe.
Mavin: I put to you that (your answer) doesn’t make sense. The bonds and loans were done by 1MDB; we cannot change the sum that needs to be paid back. Until 2040, 1MDB has to pay (back the sums owed). It doesn’t change the fact that the money should be paid. Do you agree or disagree?
Afidah: Whether investigations were done or not, 1MDB has to take money from MoF Inc and pay back the interests (on 1MDB’s debts).
Afidah also testified that 1MDB still had an overdue debt of RM26.29 billion, including RM9.312 billion for the coupon payments of the IMTN that would mature on May 27, 2039.
The balance of RM16.981 billion was to repay the shareholder’s advance from MoF Inc that was given to 1MDB to help it repay its debts, she said in the trial before Justice Raja Ahmad Mohzanuddin Shah Raja Mohzan.