Axe to fall on 1MDB staff soon

Axe to fall on 1MDB staff soon

Singapore - Seven years after it was set up, troubled 1Malaysia Development Berhad (1MDB) is laying off staff as a storm of controversy around it continues.

The Business Times understands that affected staff will receive their pink slips from management soon.

When contacted, 1MDB president Arul Kanda told BT the firm was evaluating its staff requirements on an ongoing basis.

"1MDB constantly evaluates its staffing and operational requirements on an ongoing basis," he said.

"We will of course make an official announcement as and when there are relevant updates to be made."

1MDB, the holding company, has 33 staff, according to Mr Arul.

The beleaguered strategic investment firm's staff retrenchment exercise could signal that 1MDB is one step closer to monetising key assets and winding down operations, a decision made early last year to tackle its mounting debt woes that had metastasized into a full-blown financial scandal which has engulfed Malaysian Prime Minister Najib Razak.

1MDB's plans to unload its assets, under a strategic review led by Mr Arul, is clicking at a seemingly hurried pace even as the outcome of multi-pronged probes into the firm's dealings and money trail in Malaysia and abroad remain uncertain.

The rancorous political crisis triggered by the scandal continues with former Malaysian leader Mahathir Mohamad firing another salvo on Wednesday by filing a lawsuit against Mr Najib for alleged corruption and abuse of power.

But for 1MDB, the firm at the centre of the storm, Wednesday morning was a big milestone; the company said it completed the almost RM10 billion (S$3.4 billion) cash sale of its power assets to China General Nuclear Power Corp (CGN) following the satisfaction of all conditions precedent in the share sale and purchase agreement.

Under the deal first announced last November, China's state-owned nuclear energy giant will assume the assets' gross debt and cash reserves.

"The completion (of the share sale and purchase agreement) marks the conclusion of the Edra monetisation, a significant and tangible milestone of the 1MDB rationalisation plan," said 1MDB in a statement.

The other prime asset on the block is 1MDB's Bandar Malaysia property project which it has already agreed to sell to a joint-venture consortium comprising China Railway Engineering Corp and Malaysia's Iskandar Waterfront Holdings.

This article was first published on March 24, 2016.
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