(Oct 12): The 1Malaysia Development Berhad (1MDB) board of directors must be castigated for failing to fulfil its fiduciary duties, DAP said after authentic minutes of the firm's meetings showed the redemption of a US$2.318 billion (RM9.6 billion) investment from the Cayman Islands was made without proper consultation with the board.

DAP national publicity chief Tony Pua asked why the board had allowed the state fund's executives to conduct major transactions without prior knowledge or approval.

He said it was clear that their appointment was just for show and that they were working for the powers that be.

"No board worth their salt would have tolerated the degree of transgressions which took place within the company which included embezzlement and misappropriation of billions of ringgit," he said in a statement today.

The Petaling Jaya Utara MP said throughout the years leading up to the 1MDB scandal, the board, made up of illustrious individuals, had allowed the 1MDB top executives to run circles around them.

The minutes revealed that key multi-billion-ringgit decisions had been made without proper consultation with the board of directors.

On Saturday, 1MDB president Arul Kanda Kandasamy confirmed that Sarawak Report's latest expose had been based on authentic minutes of the troubled firm's board meetings, but denied the website's claim that he was a liar over cash redeemed from an overseas investment.

Pua said today that according to the minutes, board chairman Tan Sri Lodin Wok Kamaruddin said the board had in the past made decisions via directors’ circular resolution (DCR) without the benefit of deliberation, including decisions on the guarantee of loans and the pledge of redemption of proceeds to Deutsche Bank.

But the federal lawmaker asked how the board could be clueless when the entire proceeds to be received from the US$2.318 billion investment parked in the Cayman Islands was pledged to Deutsche Bank to secure a US$975 million loan.

"The ensuing question then is, if the board didn’t deliberate and approve the decision, then who did?

"Did the then-top executives of 1MDB have the audacity to carry out the above transaction of their own accord?

"Or did Prime Minister Datuk Seri Najib Razak approve the transaction and bypass the board of directors?" Pua asked.

He said regardless of whether the 1MDB top management had acted on their own accord or on approval from the prime minister, the 1MDB board of directors must be castigated for failing to fulfil their fiduciary duties as directors of the company.

He added that Malaysians were also concerned that two other statutory funds managing billions more of their hard-earned savings were led by the same directors who had demonstrated such incompetence in 1MDB, namely Lodin who is chairman of Lembaga Tabung Angkatan Tentera (LTAT), and Tan Sri Ismee Ismail who is the chairman of Lembaga Tabung Haji.

"Their complete failure to navigate the company, ensure proper corporate governance and institute checks and balances contributed in no small way to the financial disaster that is 1MDB.

"The authorities investigating 1MDB, assuming there are any still investigating the debt-laden company, must investigate the role of these directors in the board and charge them for their complicity in the entire monstrous scandal," Pua said. – The Malaysian Insider