KUALA LUMPUR: Malaysia will still face billions of ringgit in losses from the 1Malaysia Development Bhd (1MDB) scandal, no matter how much more the government recovers, says Datuk Seri Amir Hamzah Azizan.
The Finance Minister II said further asset recoveries would not fully offset the financial losses suffered by the country, while damage to investors’ confidence following the scandal also remained a concern.
“Although there is good potential for additional recoveries based on the strength of the government’s case in seeking compensation from those responsible, these recoveries will not eliminate the losses arising from the 1MDB scandal or reduce the country’s losses from tens of billions of ringgit,” he said in a written parliamentary reply yesterday.
He was responding to Ipoh Timor MP Lee Chuan How, who asked about the government’s target for settling 1MDB’s remaining net liabilities and the expected value of outstanding asset recovery claims.
Amir Hamzah said the financial burden also came at the expense of development priorities, with billions of ringgit in public funds channelled towards settling 1MDB’s debts and financial commitments.
Since 2017, the government has spent RM18.7bil from operating and development allocations approved under successive annual budgets to meet 1MDB’s financial obligations, he said.
In March 2023 alone, the government allocated RM13bil from its development expenditure to redeem US$3bil in government-guaranteed 1MDB bonds.
“The amount represented 13.1% of the RM99bil development allocation for that year.”
Amir Hamzah said the funds could otherwise have funded national development priorities, including building schools and hospitals, road infrastructure, rural water supply, and programmes benefitting the people.
He also clarified that settling 1MDB’s outstanding debts did not necessarily mean the government had recovered the public funds already spent on those obligations.
As of Aug 31, 2026, the government had paid RM42.5bil towards 1MDB-related debts and commitments, including principal, interest and other costs, he said.
A further RM8.9bil remained payable under government-guaranteed Islamic Medium Term Notes, comprising RM5bil in principal and RM3.9bil in interest. The sukuk are scheduled to mature in 2039.
This brought the total amount already paid and still payable to RM51.4bil, Amir Hamzah said.
After accounting for RM31.3bil in recovered funds and assets, the government’s estimated net financial burden stood at RM20.1bil, assuming no further recoveries.
Amir Hamzah said the government could not determine how much it would ultimately recover from outstanding 1MDB-related claims.
“The amounts depended on court decisions, appeals, the identification of recoverable assets and the ability to enforce court orders, particularly overseas.
“As such, amounts claimed in legal proceedings or awarded by courts could not automatically be regarded as funds that would eventually be returned to Malaysia,” he said.
He said the government had not set a definitive deadline for resolving all 1MDB-related legal claims and asset recovery efforts.
He also stressed that the 2039 maturity date for the outstanding sukuk was separate from the timeline for resolving legal proceedings and recovering misappropriated assets.
