The Deutsche Bank loan that 1MDB won't say what it was for

INTERVIEW | 1MDB began to unravel at the end of 2014, when it failed to repay an RM2 billion bridging loan to a group of local lenders.

The Malaysian fund was given some breathing space when tycoon Ananda Krishnan stepped in with another loan of the same amount.

But 1MDB's unravelling accelerated when a consortium of banks led by Deutsche Bank abruptly demanded an early repayment of a US$975 million loan in May 2015, four months ahead of its due date.

Presiding over this tumultuous period was 1MDB chief executive officer Arul Kanda Kandasamy, who was brought in for his expertise in debt restructuring.

But Arul Kanda has done more than just restructure debt, becoming the public face of 1MDB in a way that his predecessors have not done and vigorously defending the fund against allegations of misappropriations.

The Deutsche Bank loan recall led to a series of events that remains unresolved to date.

Faced with a cash crunch, 1MDB got an RM1 billion advance from Abu Dhabi's International Petroleum Investment Company (IPIC) to pay off the Deutsche Bank loan.

But the 1MDB's deal with IPIC turned sour, prompting the two parties to go for arbitration, and later a settlement, which saw 1MDB having to pay around US$1.2 billion to IPIC.

This was despite an earlier US$3.5 billion 1MDB claimed it already paid to IPIC but was unaccounted for. Both parties have since entered into "goodwill" discussions on the matter.

So, what was the Deutsche Bank loan meant for?...