Troubled state fund 1Malaysia Development Berhad (1MDB) announced on Friday that it has made the necessary payment, in compliance with the settlement deed, to Abu Dhabi’s International Petroleum Investment Company PJSC (IPIC).
The strategic development firm has now remitted, so far, an equivalent of $350 million to IPIC, one day ahead of 1MDB’s payment deadline to the state-owned fund. The investment body said that all the funds paid were from the proceeds of an on-going rationalization program.
In order to resolve its debts, the Malaysian fund has agreed in April to pay the investment firm of about $1.2 billion, and the $350 million was the first of a two-part debt payment, under the debt-settlement contract.
The deal also states that 1MDB and the Finance Ministry would take responsibility for all future interest and primary payments under two bonds, worth $3.5 billion in total.
The remittance came after 1MDB was given an extension by IPIC to fulfill its initial debt payment, given that it could at least present $310 million by August 12.
This ultimatum was a result of 1MDB’s failure to meet the deadline on July 31, but now that it has made its first payment, the Malaysian fund’s remaining balance including interest, is now expected to be paid by the end of this month. 1MDB’s second payment is due by the end of 2017.
Global Investigation Over Stolen 1MDB Funds
1MDB along with its founder, Prime Minister Najib Razak, has been hit with allegations concerning billions were looted from the fund in overseas deals. Both 1MDB and Najib denied any wrongdoing.
The money laundering probes are currently ongoing in at least six countries, including the US, Switzerland, Singapore, and Luxembourg. They are all investigating whether banks and individuals were involved in 1MDB’s alleged embezzlement and money laundering.
1MDB’s payment to IPIC gives both the company, and Najib, which would have done more obligations from IPIC, a breather until the next portion of the payment due by the end of this year.
US Puts 1MDB Civil Lawsuits on Hold
The US Justice Department officials have asked a judge in Los Angeles to postpone civil forfeiture charges against assets obtained by those involved with 1MDB, as working on these cases may slow down the criminal investigation.
The Justice Department previously filed civil complaints against 1MDB, seeking to take hold of assets worth about $1.7 billion which were believed to have been acquired using stolen funds from 1MDB.
The US is also trying to find out as part of the global effort, how much of the $6 billion that the state fund grew for development projects was supposedly embezzled or involved in money laundering
The country is stepping up its investigation towards the Malaysian state fund’s stolen money, in an effort to find out how much of the funds were raised by 1MDB, and was used to pay for extravagant real estate in New York, London, Beverly Hills, film productions, private jets, yachts, and more.
It also includes an interest worth $107 million in a music company bought by Malysian financier, Low Taek Jho, or Jho Low. Low has previously denied the crime.