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Will government now use EPF funds to help 1MDB, Amanah asks

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Amanah strategy director Dr Dzulkefly Ahmad says no one has a clue as to what 1MDB’s default really means to Malaysia and the ringgit.

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KUALA LUMPUR: Now that 1MDB has defaulted on paying money it owes to Abu Dhabi-based International Petroleum Investment Company (IPIC), Amanah wants to know if the government will dip into the coffers of Petronas or the Employees Provident Fund.

Amanah strategy director Dr Dzulkefly Ahmad said in a statement it was not unlikely that 1MDB and the ministry of finance would be unable to come up with the money in the extra five days given to it by IPIC to do so.

IPIC had said it had not received payments of US$602.72 million and US$26.02 million that were due to be paid under a consent award and its settlement of a debts problem with the ministry of finance and 1MDB. The money was to have been paid by July 31.

On Tuesday, 1MDB said it had written to IPIC to say that the money would be paid in August.

Dzulkefly said it seemed that the government was frantic, noting that all the “rationalisation programmes” 1MDB had talked about also appeared to be incapable of preventing it from defaulting.

“Now it is known to the entire world that 1MDB is unable to pay and were graciously given an extension until Aug 5. My guess is 1MDB and even the ministry of finance will still default.

“No one has a clue as to what this default really means to Malaysia and the Malaysian ringgit? Will (Prime Minister) Najib Razak now do the obvious and resort to Petronas’ coffers or EPF’s savings?”

He said “hot on the heels of the bad news of Dalian Wanda’s inability to be the master developer for Bandar Malaysia, this default is surely adding salt to injury”.

He also said legal proceedings in a French court over alleged corruption in Malaysia’s purchase of the Scorpene submarine and the indictment of Razak Baginda, Najib’s one-time political analyst, could not have come at a worse time.

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