Malaysia drains crowdsourced fund to repay 1MDB debt

KUALA LUMPUR • Malaysia’s Hope Fund has been exhausted as the government used all RM205 million (S$68 million) it raised from the public to pay off some of the debt incurred by 1Malaysia Development Berhad (1MDB), Finance Minister Lim Guan Eng said yesterday.

The Finance Ministry had set up Tabung Harapan, or the Hope Fund, following a shock election victory in May last year by a coalition led by Prime Minister Mahathir Mohamad.

The fund drew contributions from Malaysians as well as businesses eager to help after the government said the country’s debt was higher than disclosed by the previous administration.

The fund had collected RM202.7 million in donations and RM2.8 million in interest as of January, Mr Lim said in a statement.

Debt at troubled state fund 1MDB stands at about RM50.5 billion, he added.

About RM144 million from the Hope Fund went towards interest payments on 1MDB’s Islamic Medium Term Note sukuk in May.

The government used the remaining RM61.7 million from the Hope Fund last Thursday to offset another interest payment on the same bond. The remainder RM82.07 million for the November coupon was paid using funds from the recovery of 1MDB assets, which amounted to about RM1.45 billion, Mr Lim said.

“The government is committed to pay all the loan obligations that were inherited by the previous administration,” Mr Lim said in his statement.

The finance chief added that it has or will cost RM13.9 billion to pay the debts of 1MDB and its former subsidiary SRC International through 2020.

The next 1MDB payment will be in March, for interest of RM66 million on another bond.


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