KUALA LUMPUR (May 21): Second Finance Minister Datuk Seri Ahmad Husni Mohamad said the Ministry of Finance (MoF) is looking at restructuring its wholly owned debt-laden strategic investment fund, 1Malaysia Development Bhd (1MDB), as any default would cause “systemic effect”.

"We do not want it to default because if there is a default then it will cause systemic effect. So we do not want (that),” Ahmad Husni told the media at Parliament lobby today.

When ask how the systemic effect could be avoided considering 1MDB is currently cash-strapped, Ahmad Husni pointed out that the investment strategic fund is only facing a short-term cashflow problem.

"It's not cashflow problem. The problem is short-term cashflow ... that's all. So we will settle it," he explains, adding that 1MDB’s assets are sufficient to pay off its debts.

The minister said MoF is currently “compiling a report” on restructuring 1MDB and it will submit it to Cabinet next week.

When asked if the he was confident that 1MDB can be restructured, he said "I believe we can. I'm completing the report, then I will table it to Cabinet next week, then maybe after that we can announce the next step for the restructuring of 1MDB."

"... If you look at 1MDB they have changed the management team, now Arul (Arul Kanda) compared to a different group before.

"So the position is very clear. When you want to do restructuring, the position must be clear and now the position is very clear ... and then [we'll look at] how to go ahead," Ahmad Husni said, noting that the plan is very concrete.

On opposition claims that 1MDB has no money in BSI Bank, Ahmad Husni assured that there will be an end to the story. He stressed that the opposition should not jump to conclusion so soon.