KUALA LUMPUR: Former prime minister Tun Dr Mahathir Mohamad has questioned some RM27 billion of borrowed money by 1Malaysia Development Bhd (1MDB) that is still unaccounted for, after deducting the ascertained investments the strategic development company had made with the RM42 billion debt it has accummulated to date.

“Where is the rest of the money?” Dr Mahathir asked in his blog posting titled “1MDB” yesterday.

He went on to list all the known investments that 1MDB had made with the RM42 billion it had borrowed. They included the RM8.5 billion purchase of Tanjong Energy Holdings Sdn Bhd (now known as Powertek Energy Sdn Bhd) from tycoon T Ananda Krishnan, the RM2.3 billion purchase of Genting Sanyen Power Sdn Bhd (now known as Kuala Langat Power Plant) and the RM1.2 billion for Jimah Energy Ventures Sdn Bhd.

Others were the purchase of 70 acres (28ha) of land in Jalan Tun Razak here for RM320 million, and the purchase of 234 acres of land in Air Itam, Penang for RM1.38 billion.

“These are all the purchases that are known. They all add up to RM14.7 billion. So, there is approximately RM27 billion left.

“[Furthermore,] more than US$1 billion (RM3.63 billion) were said to be paid to PetroSaudi International Ltd without verification as to the value of the company or its assets,” he noted.

The former prime minister then threw a barrage of questions regarding the money that 1MDB had registered in the Cayman Islands, which was reported to amount to US$2.318 billion.

“What was brought back to Malaysia? What was brought back and deposited in a Swiss bank in Singapore? Why? Where was the money brought back from? Why is this money not used to pay the RM2 billion interest? Why did Bank Negara Malaysia allow the first tranche to be repatriated to Malaysia and not the second tranche?” asked Dr Mahathir.

Whistleblower site The Sarawak Report had revealed that 1MDB had allegedly given false bank statements pertaining to its subsidiary’s accounts to the Singapore branch of Swiss bank BSI SA.

“Now the Swiss bank has told the Singapore authorities that the document did not originate from them and does not represent a true account of the assets of 1MDB, so where is the money said to be registered in the Cayman Islands and is now brought back?” wrote Dr Mahathir.

Dr Mahathir then stated that not only is 1MDB losing money, but the government had also lost RM25 billion when 1MDB had only paid RM683 million for the Jalan Tun Razak and Sungai Besi airport land.

“It should be noted that the TRX (Tun Razak Exchange) land is close to land recently sold at RM7,000 per sq ft (psf). Assuming the market price is RM3,000 psf, the true value of this land is RM6 billion. The government has therefore lost RM5 billion plus because 1MDB paid only RM320 million.

“With regard to the Sungai Besi airport land, 1MDB paid RM363.5 million for 495 acres or RM91 psf. Assuming the market price for this land is RM1,000 psf, the government lost approximately RM20 billion,” said Dr Mahathir.

He explained that 1MDB had revalued all its assets at RM52 billion, but that was only because government land had been purchased at far below the market price.

“1MDB can only use [the revaluation surplus] to repay loans if it succeeds in selling them off as land or after development. Progress on TRX is very slow and there is no work on the Sungai Besi land. No money will be generated during development, only outflows,” said Dr Mahathir.

He added that when huge sums of money disappear, then those entrusted with its management must answer for the disappearance.

“The disappearance of a huge amount of borrowed money by 1MDB, and Najib’s (Prime Minister Daruk Seri Najib Razak) inability to answer questions regarding what happened to the funds disqualifies him from being the prime minister of Malaysia,” wrote Dr Mahathir.

He also pointed out that three former chief executive officers of 1MDB had resigned without explanation.

The current president and group executive director of 1MDB is Arul Kanda Kandasamy, who was the former executive vice-president and head of investment banking at Abu Dhabi Commercial Bank.

1MDB is a strategic development company wholly owned by the Ministry of Finance. Najib is the chairman of the board of advisors to 1MDB.

This article first appeared in The Edge Financial Daily, on April 24, 2015.