Highlight 1MDB to use US$1.83b that was supposed to be repatriated to restructure its debt, says BNM Governor

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1MDB to use US$1.83b that was supposed to be repatriated to restructure its debt, says BNM Governor

By Billy Toh / theedgemarkets.com   | May 13, 2016 : 2:50 PM MYT


KUALA LUMPUR (May 13): Bank Negara Malaysia has been informed that 1Malaysia Development Bhd (1MDB) will use the US$1.83 billion it was supposed to be repatriating back to the country to restructure its debt, according to new central bank governor Datuk Muhammad Ibrahim.
Time will be given for the state investment fund to repatriate the fund it has abroad, and the central bank has decided against imposing a deadline for the repatriation, as the process of debt restructuring involves a lot of different parties and may take a while, said Muhammad.
“Restructuring of debt can take time,” Muhammad told reporters during the bank's announcement of the country's economic quarterly performance today.
Recall that BNM had fined 1MDB for “failure to fully comply with directions under the Financial Services Act” and given May 30 as the deadline for 1MDB to pay the compound. It had also said then that the payment of the compound would mark the close of its investigation on the state-owned fund.
Subsequently, 1MDB had issued a statement saying the fund would pay the fine by or before the deadline.
“We have closed this investigation on 1MDB,” Muhammad added today.
Earlier, Muhammad announced that Malaysia had recorded its slowest economic growth in 6.5 years since the third quarter of 2009, with a growth of 4.2% in the first quarter of 2016, down from the 4.5% growth recorded in the previous quarter, and the 5.7% seen in the same quarter last year.