KUALA LUMPUR (April 11): Transparency International Malaysia (TI-M), which called for the disclosure of the auditor-general's (AG) report on 1Malaysia Development Bhd (1MDB), is urging Putrajaya to set up a Royal Commission of Inquiry to conduct a full investigation into the numerous allegations on 1MDB to track the money flow and whether any party benefited from the transactions.
The non-governmental organisation (NGO) made the recommendation following the parliamentary Public Accounts Committee (PAC) issuing its findings report on 1MDB last week, which revealed the lack of diligence of the state strategic fund's board of directors, the management as well as the advisory board, which failed to adhere to good corporate governance practices.
In a statement today, TI-M also called on all relevant enforcement authorities to look at and scrutinise the report in detail and take appropriate action without fear or favour against any officer or employee or party connected with the company who may have committed any malpractice in the company while in office.
"We recommend 1MDB to engage forensic accountants to conduct a forensic investigation on the past activities of the company to find out in depth whether there were any other irregularities and mismanagement which could have occurred," it said, adding that such practices should be more frequently used in the seven government-linked investment companies (GLICs) and over 200 government-linked companies (GLCs).
Apart from that, TI-M said the AG's report on 1MDB should be declassified and tabled as a full report in parliament and made public.
"The purpose of the AG's office is to serve the interest of the public. The Federal Constitution and the Audit Act 1957 provide that the AG shall submit his reports to the Yang Di-Pertuan Agong, who shall cause them to be laid before the House of Representatives. This is constitutionally what is provided for and there should be no blockage or excuse preventing the rakyat from seeing the full AG report.
"There should be nothing to hide," the NGO added.
"Now is the time for the government to prove that it truly stands for integrity and transparency and the rule of law," the statement read, noting there has been a lot of speculation and allegations due to the lack of disclosure on the dealings of 1MDB by the government.
"The PAC findings and report has been a step in the right direction but more questions have been raised which demand further probing and investigation especially as to how the funds were ultimately used — let the right, independent and professional people finish the job or the ghost of 1MDB will never be laid to rest," it added.
TI-M said it is also very concerned and disappointed with the failure of 1MDB's three-tier check-and-balance system comprising a board of advisors, a board of directors and a management team in discharging their duties.
"These are not private equity funds, this is a government controlled entity with reputable and seasoned personalities on the board and an advisory board chaired by the Prime Minister himself, entrusted with government funds and loans financially backed by the government.
"This ultimately means it is the rakyat's hard earned tax money which is at stake or alternatively the nation's assets which will be used in any bailout," it said.
Last week, the PAC said it wants the former chief executive officer of 1MDB to be investigated over the affairs of the troubled strategic investment fund, which had piled up debts of RM50 billion as at January 2016.
It also blamed the board of directors for failing to carry out their responsibilities.
"PAC is of the opinion that former chief executive of 1MDB Datuk Shahrol Azral Ibrahim Halmi must take responsibility for the weaknesses," the report said.
"As such, we request enforcement agencies to investigate (Shahrol) and others in management," the report read.