'Recover 1MDB assets through Singapore': Vivian Balakrishnan

PHOTO: Reuters

KUALA LUMPUR - Malaysia can go through the courts in Singapore to establish ownership of any seized assets linked to the 1Malaysia Development Bhd (1MDB) and take steps to recover them, said its Foreign Minister Dr Vivian Balakrishnan.

Singapore will continue to assist Malaysia in its investigations into 1MDB, Singapore's Straits Times reported him as saying yesterday.

Dr Balakrishnan said Singapore has been thoroughly investigating 1MDB-related offen­ces committed in the republic since 2015.

"We took these enforcement and regulatory actions not because of political calculations, but because it is in our national interest to reaffirm and protect Singapore's reputation as a clean, transparent and trusted international financial centre," he said in Parliament yesterday to questions from Singaporean MPs on relations between Singapore and Malaysia.

Singapore has taken action since 2015 against those who have broken laws here in relation to the scandal - two banks have been shut down, some others fined for regulatory breaches, and individuals jailed and fined, he said.

"So far, we are the only jurisdiction to have done so."

Dr Balakrishnan said Singapore has also co-operated fully with Malaysia's official requests for information on 1MDB-related transactions, providing this information in 30 exchanges between March 2015 and August 2016.

This included providing Malaysia with additional information on 1MDB-related fund flows on multiple occasions, he added.

On the Kuala Lumpur-Singapore High Speed Rail (HSR) project, Dr Balakrishnan said Singapore continues to incur costs as it is still meeting its obligations under the agreement, while waiting for Malaysia to clarify its position on the project.

He said Singapore has sent the Malaysian government a third-person note - a diplomatic note - requesting a clarification on the issue, following announcements from Prime Minister Tun Dr Mahathir Mohamad that the project would be dropped.

"Should Malaysia cause the HSR project to be terminated, we will deal with the question of compensation from Malaysia for costs incurred, in accordance with the binding agreement and international law," he said.

On the 1962 Water Agreement with Malaysia, Dr Balakrishnan said Singapore will fully honour the terms and expects Malaysia to do so as well.

"The 1962 Water Agreement was guaranteed by both Singapore and Malaysia in the 1965 Separation Agreement, which in turn was registered with the United Nations," he informed the Singaporean lawmakers.

"Any breach of the 1962 Water Agreement would call into question the Separation Agreement, which is the basis for Singapore's very existence as an independent sovereign state."

Straits Times reported that water has been in the spotlight in recent weeks as an issue that could affect bilateral ties, after Dr Mahathir criticised the water supply deal, saying the price of water sold to the republic is "ridiculous".

Dr Balakrishnan stressed neither Malaysia nor Singapore "can unilaterally change the terms of this agreement between our two countries".

"Malaysia lost its right to review the price of water under the 1962 agreement in 1987 and in fact, Malaysia has previously acknowledged that they themselves chose not to ask for a review in 1987 as they benefited from the pricing arrangement under the deal," he added.

Johor currently buys treated water from Singapore at 50 sen per 1,000 gallons, as provided for under the 1962 Water Agreement.

This is a fraction of the cost to Singapore of treating the water, said Dr Balakrishnan.

"Hence, in 2002, then-PM Dr Mahathir said that Malaysia did not ask for a review when it was due as Malaysia knew that any revision would also affect the price of treated water sold by Singapore to Malaysia."

It costs Singapore RM2.40 (S$0.81) to treat every 1,000 gallons of water. By selling it to Malaysia at 50sen, Singapore is providing a subsidy of RM1.90 per 1,000 gallons, he added.