UPDATE: KUALA LUMPUR (March 6): Deputy Prime Minister Tan Sri Muhyiddin Yassin has come out to say that public funds should not be used to bail out debt-ridden 1Malaysia Development Bhd (1MDB).

In a statement issued this evening, he said 1MDB's board of directors must explain some of the state-owned strategic investment fund's dealings that have appeared not to give any long-term benefits to the company or the government.

"The 1MDB board must also bear responsibility and be prepared to face legal action if the verification (by the Auditor-General) revealed that there was negligence or impropriety involved in 1MDB dealings," he added.

On Wednesday, Prime Minister Datuk Seri Najib Razak had instructed the Auditor-General (A-G) to independently verify 1MDB's accounts. Najib, who is also the Finance Minister, is chairman of 1MDB's advisory board.

Boustead Holdings Bhd group managing director and deputy chairman Tan Sri Lodin Wok Kamaruddin, meanwhile, is the chairman of 1MDB.

While welcoming the prime minister's request for the A-G to verify 1MDB accounts, Muhyiddin said it must be done in a transparent, independent and comprehensive manner since the company's inception, as the allegations of dereliction relates to transactions done since 2009, which were not included in the 2013 annual accounts audited by Deloitte Malaysia.

This includes allegations of misappropriation in the joint venture between 1MDB and Petro Saudi International Ltd, by several news portal, he added.

"I believe that only through a transparent, independent and comprehensive audit, will the government-owned strategic investment fund be able to clear its name," he said, adding that the A-G should be provided with the necessary resources, in order to prepare a complete and comprehensive audit report in a short time.

Muhyiddin added that the Public Accounts Committee should start their own probe into the company, which has raked up RM42 billion in debts since 2009, without having to wait for the A-G's report to be completed.

The deputy prime minister's remarks come just two days after the Cabinet had expressed confidence that no wrongdoing has been committed within 1MDB, even as controversies continue to plague the company.