Tycoon Ananda never helped settle 1MDB loan, says CEO

1MDB president and group executive chairman Arul Kanda Kandasamy dismisses talk of T. Ananda Krishnan helping to pay the company's RM2 billion debt. – Reuters pic, February 15, 2015.Billionaire magnate T. Ananda Krishnan never helped debt-ridden strategic investor 1Malaysia Development Berhad (1MDB) resolve its RM2 billion loan for its power unit, Utusan Malaysia reported today.

The weekend edition of the paper Mingguan Malaysia quoted 1MDB president and group executive chairman Arul Kanda Kandasamy as saying that such talk was merely speculation by outsiders.

He said the speculation should stop immediately, since the company had already settled the loan on Friday, six days before bankers triggered a default.

"Honestly, Ananda himself never talk about this. This is speculation started by third parties," he was quoted as saying by the Umno-controlled Malay daily.

Arul Kanda also said that the banks which had lent 1MDB money for the loan, had never made any announcements on the matter.

Maybank has 58.99% of the loan while RHB has 32.41%. The other lenders are Alliance Investment Bank Bhd (4.06%), Malaysia Building Society Bhd (3.24%) and Hwang DBS Investment Bhd (1.29%).

The Malaysian Insider, citing sources, recently reported that 1MDB had settled the loan with Ananda's help.

After the debt was paid, Arul Kanda issued a statement to confirm that it had been settled, but did not disclose the source of the funds.

The payment is a last-minute reprieve for 1MDB – a cross between a sovereign fund and a private investment firm wholly owned by the Finance Ministry. Its debt woes were seen as pressuring the ringgit and Malaysia's sovereign credit rating.

The RM2 billion is part of a RM5.5 billion bridging loan to the relevant banks.

The 1MDB subsidiary, Powertek Investment Holdings Sdn Bhd, took the loan last May to refinance a RM6.17 billion bridging loan taken in 2012 to part finance the purchase of power assets.

1MDB restructured the RM5.5 billion bridging loan into two tranches – a RM3.5 billion loan due by August 2024 and a RM2 billion loan due last November, according to data from LPC, a Thomson Reuters unit specialising in loans.

The development fund, which owns a large portfolio of power plants, has missed payments on the bridge loan that was due end-December and its lenders were keen to see it paid before they had to write it down in first-quarter earnings, bankers said.

Mingguan Malaysia also reported that Arul Kanda denied a New York Times report which linked controversial businessman Low Taek Jho with 1MDB.

- TMI