1MDB top brass should clear the air, says Ahmad Maslan

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KUALA LUMPUR: 1Malaysia Development Bhd’s (1MDB) top management should face the public and clear the air on the sovereign wealth fund’s operations and financials, Deputy Finance Minister Datuk Ahmad Maslan said.

Ahmad said 1MDB, a wholly-owned company of the government, has to clearly explain the dynamics of its operations and financials to the public. This is because 1MDB’s operations involve taxpayers’ money.

“The company should engage and communicate more clearly. 1MDB has good assets and I am confident there is no problem with that,” Ahmad told reporters after the launch of Malaysia Debt Ventures Bhd’s new corporate strategy yesterday.

He was responding to Batu Kawan Umno division deputy chief Datuk Seri Khairuddin Abu Hassan’s move to lodge a police report against 1MDB last Friday.

According to news reports, Khairuddin had lodged the report against 1MDB, which recorded debts of RM41.9 billion.

The Edge Financial Daily understands that the Finance Ministry is expected to issue a comprehensive statement on 1MDB today to clear some of the negative press coverage that the company has been receiving.

According to sources, Prime Minister Datuk Seri Najib Razak, faced with concerned queries by several ministers at Wednesday’s Cabinet meeting, yesterday agreed that a more comprehensive statement be issued. The Cabinet then ordered Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah to look into the matter and issue the statement.

In last week’s meeting chaired by Deputy Prime Minister Tan Sri Muhyiddin Yassin, the Cabinet started discussing 1MDB after a minister brought up the issue.

The discussions were said to be “lively” as the country’s second sovereign wealth fund has been a target for various attacks by the Opposition and even from within the Barisan Nasional ranks, including former prime minister Tun Dr Mahathir Mohamad.

Najib was then away on an official visit to South Korea.

It is learnt that several ministers were concerned that they were in the dark about 1MDB and could not give a clear explanation about the company.

1MDB is now in the process of listing its power assets and is involved in the Bandar Malaysia and Tun Razak Exchange property developments in Kuala Lumpur.

1MDB is Malaysia’s second sovereign wealth fund after Khazanah Nasional Bhd.

In just five years of operations, the fund has accumulated RM38 billion in debts but concerns about its financial health were brushed aside by chairman Tan Sri Lodin Wok Kamaruddin, who said its assets stood at RM51.4 billion, about RM2.5 billion more than its liabilities of RM48.9 billion as of March 31 this year.

Under fire for investments in the Cayman Islands, a base for hedge fund operations, Putrajaya had announced that 1MDB would bring back all its funds by year end, despite registering a return of 6% to 7% as of the end of last year.

Khairuddin had lodged a police report calling for a “detailed and comprehensive” investigation, urging authorities to interrogate 1MDB directors and representatives of any company that might be implicated in its scandals.

 

This article first appeared in The Edge Financial Daily, on December 19, 2014.