KUALA LUMPUR (June 8): 1Malaysia Development Bhd (1MDB) has denied a report by The Edge Weekly on the debt-ridden state fund’s transfer of funds to a third party, as reported in the latest issue of the magazine.

“The Board of Directors of 1MDB categorically denies that it has ever approved any action or series of actions to transfer funds from the company to any third party other than the intended beneficiary.

“Notwithstanding this, 1MDB has shared information with the Auditor General Department and Bank Negara Malaysia for further review and investigation,” said 1MDB president and group executive director Arul Kanda.

In its latest issue, The Edge Weekly had published emails detailing how 1MDB’s funds were planned to be used to take over UBG Bhd, which was then listed on Bursa Malaysia.

The plan, codenamed ‘Project Utopia’ was reported to have involved Casey Tang, an executive director at 1MDB, Patrick Mahony, a top executive of PetroSaudi Group and chief executive officer of joint-venture company 1MDB PetroSaudi Ltd (BVI), Nik Faisal Ariff Kamil, who had just joined UBG as chief investment officer and Jho Low.

The Edge said this was the start of a plan that would eventually see Jho Low using US$260 million of cash from 1MDB to fund his 100% acquisition of UBG, in which he was already a substantial shareholder and a member of the board.

Criticism has been mounting over the Finance Ministry's wholly-owned investment vehicle, which has chalked up debts of up to RM42 billion since it was established in 2009.

The auditor-general is currently looking through 1MDB's books, with a preliminary report expected to be submitted to Parliament this month, while the Public Accounts Committee started its own investigation into the company on May 19.

Bank Negara Malaysia had also launched a formal inquiry into the beleaguered investment fund.

Meanwhile, quoting sources, The Edge Financial Daily today reported that the board of 1MDB will be made to step down as early as July, which could also see changes in its advisory committee, which is chaired by Prime Minister Datuk Seri Najib Razak.

1MDB’s board of directors includes chairman Tan Sri Lodin Wok Kamaruddin, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail, Tan Sri Ong Gim Huat and Ashvin J Valiram.