(May 27): Authorities must investigate whether 1Malaysia Development Bhd (IMDB) directors breached their fiduciary duties, Centre For A Better Tomorrow (Cenbet) co-president Gan Ping Sieu said today.

The former deputy minister of Youth and Sports said there are doubts on whether 1MDB directors acted with the interest of taxpayers, who are shareholders of the debt-ridden strategic investment firm, when carrying out their duties.

He said for the moment, 1MDB's explanation on criticism leveled against the company was not adequate.

"These include allegations that it paid financial advisers commission that was above market rates to raise bonds, the joint-venture with PetroSaudi under highly-questionable circumstances and the purchase of independent power production companies," he said, in a statement today.

He said "the board should exercise its powers for a proper purpose, in good faith and with reasonable care and skill in the best interest of the company, as stipulated under Section 132(1) of the Companies Act 1965."

In citing Section 4 of the Companies Act, Gan said that 1MDB's link with controversial businessman, Low Taek Jho was also questionable.

"While Jho Low is not an official director of 1MDB, there is a question of whether he is a shadow director thus having the same duties as an official director," he said.

He said the directors should call for an extraordinary general meeting to decide if they were not sure how to act in the best interest of their shareholders, especially when billions of ringgit were involved.

"This is in line with good governance which Cenbet promotes."

Gan said the Finance Ministry also had a duty to ensure the directors it nominated into 1MDB attended the Public Accounts Committee (PAC) hearings.

"The PAC should be accorded respect and importance. This includes not asking for postponements of hearings. Directors who fail to do so ought to be relieved of their duties immediately," he said.

1MDB president and group executive director Arul Kanda Kandasamy and former CEO Datuk Shahrol Halmi failed to testify at the PAC hearing scheduled yesterday.

The duo had put in an abrupt request for a 30-day extension before testifying to the PAC, citing important overseas appointments.

The request was made four days before the hearing despite receiving two-weeks’ notice from the PAC.

Gan added that Cenbet supported the Malaysian Anti-Corruption Commission (MACC) advisory board suggestion to set up of a special task force to investigate the Finance Ministry-owned state investment vehicle, established in 2009, which has chalked up debts of up to RM42 billion. – The Malaysian Insider