Cabinet: No wrongdoing committed within 1MDB

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KUALA LUMPUR: The Cabinet has come out to say it is confident that “no wrongdoing” has been committed within 1Malaysia Development Bhd (1MDB), according to a statement issued by the Prime Minister’s Office (PMO) yesterday, even as controversies continue to plague the state-owned strategic investment fund.

This follows a special briefing called by Prime Minister Datuk Seri Najib Razak yesterday between the Cabinet and 1MDB and its auditors Deloitte Malaysia amid recent media reports on 1MDB.

In the statement, Najib said: “If any wrongdoing is proven, the law will be enforced without exception.”

The prime minister has also instructed the auditor-general (A-G) to independently verify 1MDB’s accounts.

“The A-G’s report will be passed for transparent inspection to the Public Accounts Committee,” said the PMO.

During the briefing, the Cabinet was told that the recent allegations directed at 1MDB relate to transactions undertaken by third parties such as Petro Saudi International Ltd (PetroSaudi), and not 1MDB.

“The relevant investments of 1MDB have been returned in full with significant audited profit.

“Having received clarifications from 1MDB and Deloitte, the Cabinet expressed confidence that no wrongdoing has been committed within 1MDB, and their desire for the company to be allowed to implement the proposed outcomes of its strategic review,” added the PMO.

In a separate statement issued shortly after the PMO’s, 1MDB president and group executive director Arul Kanda Kandasamy said it will cooperate fully with the A-G to verify its accounts which have been audited by Deloitte, adding that the “attacks being directed at 1MDB are politically motivated”.

“These are deliberately coordinated attempts to undermine the company by spreading unsubstantiated allegations and speculation, which in turn could potentially harm the economy.

“We will cooperate fully with the A-G and hope that the outcome of his findings put to rest recent speculation,” said Arul.

Both statements come on the heels of an exposé by United Kingdom-based whistleblower site Sarawak Report recently, claiming that it has obtained “thousands of documents” on 1MDB’s operations, as well as businessman Low Taek Jho’s (better known as Jho Low) role in the company.

It also prompted opposition party DAP to lodge a police report yesterday seeking action to investigate the authenticity of the 1MDB documents leaked by Sarawak Report, which detailed alleged financial irregularities in the company. 

In a statement late yesterday, PAC chairman Datuk Nur Jazlan Mohamed said the A-G’s report should focus on five issues namely the source of a RM2 billion that was obtained by 1MDB to settle debts owed to a consortium of local banks, the injection of RM3 billion from the government or Ministry of Finance, 1MDB’s investment with PetroSaudi, whether its investment in the Cayman Islands has been brought back to Malaysia, and the change of its external auditors to approve its accounts.


This article first appeared in The Edge Financial Daily, on March 5, 2015.