(May 24): Troubles at Malaysia’s state investment company 1MDB deepened as its officials told the government the fund is insolvent and unable to repay debts that could amount to almost US$7 billion ($9.40 billion) over the next five years.

1MDB’s directors said they had questioned US$2.5 billion worth of purported investments held overseas and the company’s management failed to supply proof of such holdings over the past two years, according to a finance ministry statement on Wednesday. Its former chief financial officer told the government in March the company wouldn’t be able to service interest payments due in April and May, Finance Minister Lim Guan Eng said.

Malaysia, under newly-elected Prime Minister Mahathir Mohamad, is trying to uncover the extent of alleged embezzlement or money laundering at 1MDB, set up by former premier Najib Razak in 2009 to attract foreign investment. There are global criminal and regulatory probes as investigators attempt to trace if money flowed out through a complex web of opaque transactions and fraudulent shell companies to finance what the US said were spending sprees by corrupt officials and their associates.

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