KUALA LUMPUR (July 2): The Ministry of Finance (MoF) said the government had received the first payment from AMMB Holdings Bhd (AmBank) of RM1.8 billion, which forms part of the RM2.83 settlement related to 1Malaysia Development Bhd (1MDB).

In a statement today, the ministry said the amount had been deposited into Malaysia’s Assets Recovery Trust Account, adding that the remaining amount will be settled by AmBank in December this year and July 2022, amounting to RM515 million each.

The trust account, which is under the custody of the Accountant-General’s Department of Malaysia, has received a total of RM18.176 billion of funds seized, returned or for settlements in connection with the controversial fund, with the funds used or to be used to settle the outstanding debts of 1MDB and SRC International Sdn Bhd.

“To date, the government has repaid RM12.54 billion of 1MDB's debt and RM3.8 billion of SRC's debt. As at June 30, 2021, the outstanding debt comprising principal and coupons/profit/interest for bonds, sukuk and term loans amounted to RM39.66 billion (1MDB) and RM1.85 billion (SRC). 

“However, the current balance of the trust account is only enough to pay off the principal and interest of 1MDB's debt for 2021 and 2022 only,” said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

Once all the trust account funds are utilised, the government will continue to bear the obligation to pay the balance of 1MDB’s debts, whose issuance were backed by government guarantees and a letter of support, the MoF said.

It added that the ministry will ensure adequate allocation to settle the debts of 1MDB and SRC to manage the national financial burden created by these entities.