Finance ministry wants fresh PAC probe into 1MDB

This article first appeared in The Edge Financial Daily, on August 16, 2018.
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KUALA LUMPUR: The finance ministry is expected to table a motion in the Dewan Rakyat today for the auditor-general and Public Accounts Committee (PAC) to reopen investigations into 1Malaysia Development Bhd (1MDB).

The motion calls for a detailed investigation into the “embezzlement of monies and the scandal with regard to 1MDB and its related companies to restore the dignity of the Dewan Rakyat”.

It also calls for all related information to be made public.

In May 2016, the PAC cleared the then prime minister and finance minister, Datuk Seri Najib Razak, of any wrongdoing concerning 1MDB.

The committee, most of whose members at the time were from Barisan Nasional (BN), found no evidence of mismanagement of 1MDB on Najib’s part. It concluded that the decisions and business dealings of the state-owned entity were made by its management and board of directors.

Yesterday, Najib said he will not oppose fresh investigations by the PAC as “the truth should be known”.

“The PAC already spent six months on 1MDB [previously],” he told reporters at the Parliament lobby. “But if they want to open [the 1MDB investigation] again, I have nothing to object because we want to learn the truth,” he said.

“If the PAC wants to reopen 1MDB, it is their right but don’t go on a fault-finding mode.”

Recently, Najib was charged with seven counts of criminal breach of trust, abuse of power and money laundering related to 1MDB’s former subsidiary, SRC International Sdn Bhd. He pleaded not guilty to the charges.

Najib yesterday also called on the PAC to investigate the current government’s claim that unpaid goods and services tax (GST) refunds totalling more than RM19 billion had been misappropriated by his administration.

“I believe [the amount] is not missing [but] the PAC should do a full investigation and come up with a report as soon as possible,” he said.

Finance Minister Lim Guan Eng has claimed that RM19.248 billion is missing from the GST refunds trust account, with only RM148.6 million remaining. An internal inquiry is ongoing, he said last week, adding that a public investigation would be conducted soon.

Najib had earlier accused Guan Eng of making a politically charged baseless statement. He had claimed the current government had used money from the consolidated fund for its monthly expenses due to a revenue loss as a result of the current three-month tax holiday.

Yesterday, Najib said it is his right to defend the policies implemented during his time as premier and finance minister to counter alleged manipulation of facts by the current government.

“I am entitled to defend my policies and clear the misperception and some of the manipulation of facts and figures by the new government.

“That is only fair. Defence is a right given to any individual [and] that is why I am exercising my right to explain our policies and reasoning on certain things.

“For example, the national debt. It has to be explained. It is not RM1 trillion; it was RM686 billion when I left,” he said, referring to the current administration’s statement that the national debt stood at RM1.087 trillion and not what was claimed by the previous government.

Najib, ousted after the BN lost the May 9 general election after being in power for more than 60 years, said he is resolute in wanting to explain to the people about several issues including the alleged ill effects of the sales and services tax (SST) compared to the GST.

“Tony Pua (Pakatan Harapan-Damansara) said prices will go down [when the SST is implemented] but [actually] prices will go up. It is my duty to defend [policies] ... because I am also an MP (member of parliament). Occasionally, I will speak in Parliament,” he added.

Najib said his long-term vision for the country includes reducing the corporate tax and personal income tax in different stages to remain competitive.

He claimed the SST would not be able to stop illicit flows unlike the GST which was more transparent.

“This is what many do not understand. The GST could address the black economy where it would have controlled transfer pricing favourable to multinational corporations. If our revenue drops, welfare aid would have to be reduced or cancelled,” he said.

“When Prime Minister Tun Dr Mahathir Mohamad [first] resigned [in 2003], we did not question his policies although there were things we did not agree with. But with the change of government now, they are looking for faults and it is my right to defend the policies. The principle of being able to defend oneself is an inalienable right of any individual, so I will use that right.”