Scandal-hit Malaysian fund bosses agree to quit following damning parliamentary report

7 Apr 16

The executive board of troubled Malaysian national development fund 1MDB have today offered their resignations following a damning report into the scandal from the country’s Public Accounts Committee.

 

The bipartisan MPs called for a criminal investigation into the fund’s former CEO Shahrol Azral Ibrahim Halmi and anyone else involved in 1MDB’s alleged mismanagement.

The PAC’s conclusion marked the first time a Malaysian investigation has suggested there has been misconduct in the management of the fund, although international probes have brought out concerns. The scandal has rocked the country and seriously marred the reputation of prime minister Najib Razak, now widely accused of corruption.

While Najib himself was not named directly in the PAC report, vocal opposition leader Tony Pua said many “shocking misdeeds and transgressions” were disclosed providing “sufficient damning evidence to indict not only the entire top management, but also the entire board of directors”, reports the Guardian.

The committee also called for the abolition of the fund’s advisory board, chaired by Najib, and for any reference to the prime minister to be changed to finance minister in the company’s memorandum and articles of association.

As well as chairing the advisory board, Najib also oversaw the creation of 1MDB from a predecessor fund and heads the ministry of finance, 1MDB’s sole shareholder.

While he has repeatedly denied any wrongdoing, international investigators are reported to believe that around $1bn travelled from the fund, through state agencies, banks and companies linked to 1MDB before ending up in Najib’s personal accounts, according to the Wall Street Journal.

1MDB has been the subject of money laundering and fraud investigations in the US, Switzerland, Luxembourg and Singapore, as well as probes in Malaysia, after its finances deteriorated rapidly between 2009 and 2014, leaving it $10.77bn in debt.

The PAC’s report, published today, mentioned several overseas transactions that were reportedly made without the 1MDB board’s approval, amounting to about $1bn.

The 1MDB fund has denied that any cash went to the prime minister. Malaysia’s attorney-general cleared Najib of any corruption or criminal offences in January, stating that $681m that appeared in his bank account was a gift from a member of the Saudi Arabian royal family, which was later mostly returned.

However attorney-general Mohamed Apandi was appointed by Najib last year to replace a more critical predecessor. Apandi quickly suspended the 1MDB taskforce investigating alleged corruption and arrested or transferred investigators at the Malaysian Anti-Corruption Commission.

Srirak Plipat, Transparency International’s Asia Pacific regional director, has said the organisation is gravely concerned Malaysia is sliding rapidly towards autocracy and could be trying to cover up wrongdoing.

Pua, who sits on the committee, has said the prime minister should at least be held responsible for mismanagement at the fund. 

  • Emma Rumney

    Emma is a reporter at Cooking Recipes International. She also writes for in the UK.

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