KUALA LUMPUR (June 15): Article 117 of 1Malaysia Development Bhd's (1MDB) constitution which gave then prime minister Datuk Seri Najib Razak power to approve the appointments of directors, the senior management team as well as matters relating to financial commitments was added without consulting Minister of Finance Inc (MoF Inc), according to a former Ministry of Finance (MoF) official.
Testifying in the 1MDB-Tanore trial on Wednesday, former MoF deputy secretary-general (policy) Datuk Siti Zauyah Mohd Desa said that 1MDB had not consulted her division, which was MoF Inc at that time, over the preparation of 1MDB's memorandum and articles of association.
"I would also like to state that the preparation of the M&A for an MoF Inc company should be referred to the Ministry of Finance in accordance with the Minister of Finance (Inc) Act 1957 (Revised 1989). However, amendments to the 1MDB M&A were not referred to the MoF Inc division," she said.
MoF Inc is a corporate body established under the Minister of Finance (Inc) Act 1957 which provides MoF Inc with the authority to enter into contracts, acquisitions, purchases, possessions, holdings and to maintain tangible and intangible assets. 1MDB was a company owned by MoF Inc.
Now retired, Zauyah said that Article 117 also gave Najib power over any financial commitment (including investments), which was likely to affect government guarantees.
Testifying before Justice Datuk Collin Lawrence Sequerah in Najib's trial over the misappropriation of more than RM2 billion of 1MDB funds, Zauyah said that Article 117 does not appear in any other company owned by MoF Inc.
"I wish to state that Articles 68, 93 and 117 in 1MDB's M&A are not present in any other M&As of companies under MoF Inc. These articles only applied to 1MDB," she said, reading from her witness statement.
She said that she did not know how the clauses were added, as the preparation was done by 1MDB's company secretary, before it came under MoF Inc's purview. 1MDB was under the Terengganu state and was formerly known as Terengganu Investment Authority before it came under the purview of MoF Inc.
One of the clauses in Article 117 specifically requires the prime minister's written approval for any financial commitment by 1MDB including investments, restructuring or other matters relating to guarantees issued by the federal government, national interests, national security or federal government policies, with Malaysia's federal government to make the "final and conclusive" decision on what amounts to national interests, national security and national policies.
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