KUALA LUMPUR (June 3): Beleaguered state-owned strategic investment fund 1Malaysia Development Bhd (1MDB) said the use of the RM42 billion debt it raised since 2009 are all accounted for, including the RM27 billion that former Prime Minister Tun Dr Mahathir Mohamad claimed was not.

"In recent weeks, there has been much speculation about the use of RM42 billion of debt raised by 1MDB, and more specifically that RM27 billion of debt proceeds are alleged to be "lost" or "missing".

"We provide a summary of what the RM42 billion debt has been used for, information that is fully disclosed in 1MDB's audited and publicly available accounts from 31 March 2010 to 31 March 2014. We trust this clarification will help to clear any confusion on this matter,” said 1MDB president and group executive director Arul Kanda Kandasamy in a statement today.

1MDB's clarification comes after Dr Mahathir questioned why some RM27 billion of 1MDB’s borrowed money was still unaccounted for, after his own back-of-the-envelope calculation deducted the fund’s ascertained investments made with the RM42 billion debt it has accummulated so far.

“Where is the rest of the money?” he had asked in his blog posting titled “1MDB” in April.

1MDB showed that its debt now stood at RM41.8 billion, of which RM18 billion was spent as “IPP costs” on its independent power plants: Powertek Energy Sdn Bhd (RM8.5 billion), Kuala Langat Power Plant (RM2.3 billion) and Jimah Energy (RM1.2 billion), with RM6 billion on inherited debt.

Then RM15.4 billion was termed as “total investment costs” for its Brazen Sky (RM6.1 billion), Aabar Investment Deposit (RM4.2 billion) and GIL Funds (RM5.1 billion).  

It spent RM1.7 billion on land cost, of which RM200 million was for its Tun Razak Exchange (TRX) land (70 acres), RM400 million for its Bandar Malaysia land (500 acres) and RM1.1 billion was for the Air Itam Penang Land (234 acres).     

Meanwhile, RM5.8 billion of the debt was used to repay cost of finance and working capital which amounted RM4.5 billion, together with foreign exchange cost (RM900 million) and taxes (RM400 million).

This leaves it with a surplus cash of RM900 million, said 1MDB.

Criticism has been mounting over the Finance Ministry's wholly-owned investment vehicle, which has chalked up debts of up to RM42 billion since it was established in 2009.

The auditor-general (AG) is currently looking through 1MDB's books, with a preliminary report expected to be submitted to Parliament this month, while the Public Accounts Committee (PAC) started its own investigation into the company on May 19.