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 Parliament's Public Accounts Committee (PAC) said senior management
at 1Malaysia Development Bhd withheld crucial information from the
board and made transactions without its knowledge or approval.
The bipartisan PAC is the first Malaysian entity to level
allegations against 1MDB, which is at the center of corruption and
money-laundering investigations in the United States, Switzerland,
Singapore and Luxembourg.
U.S. Department of Justice officials have asked Deutsche Bank AG and
JPMorgan Chase & Co to provide details on their dealings with 1MDB,
as the global investigation into 1MDB widens. Goldman Sachs'
relation with 1MDB is also under review.
The 1MDB fund, which had piled up over 42 billion ringgit ($11
billion) in debt since its inception in 2009, said its board of
directors have collectively offered their resignations after the
report.
1MDB BOARD RESIGNS
The parliamentary report said former 1MDB CEO Shahrol Azral Ibrahim
Halmi has to take responsibility.
"As such, enforcement agencies are asked to investigate Shahrol
Azral Ibrahim Halmi and anyone else related," the report said.
The executive board of the fund offered their resignations after the
report was released.
It called for the advisory board of the fund - chaired by Prime
Minister Najib Razak - to be abolished and any reference to the
prime minister be changed to finance minister in the company's
memorandum and articles of association.
Najib, who founded 1MDB in 2009, was not otherwise named in the
report. Najib has consistently denied any wrongdoing. He said the
report showed that former Malaysian premier Mahathir Mohamed's
allegations against him were false.
Mahathir quit the ruling party in February and has stood with the
opposition in calling for Najib to resign over the 1MDB scandal.
The scandal has fueled a sense of crisis in a country under economic
strain from slumping oil prices and a prolonged slide in its
currency last year.
OVERSEAS BANK STATEMENTS
Shortly after it was released, opposition leader Tony Pua, who was
part of the PAC, told a news conference that Najib, should at least
be held culpable for the mismanagement at the fund.
"Anything else we don't know, as we don't have the overseas bank
statements of 1MDB," said Pua, an MP with the Democratic Action
Party (DAP).
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Pua lamented the failure to get crucial information on 1MDB’s
foreign banking transactions. The report did scrutinize several
overseas transactions that it said were made without 1MDB board
approval.
One was a $700 million transfer to an account belonging to a company
named Good Star Ltd. Another unapproved transaction of $300 million
was made to 1MDB PetroSaudi Ltd, a joint venture company set up in
the British Virgin Islands.
The report also said billions of dollars in unexplained payments
were paid to a company called "Aabar Investments PJS Ltd (Aabar
Ltd)" in 2012 without board approval.
The report said 1MDB has not clarified whether Aabar Ltd was a
subsidiary or linked to an Abu Dhabi sovereign wealth fund called
Aabar Investments or another Abu Dhabi fund called International
Petroleum Investment Corp (IPIC).
The Wall street journal, citing documents from international probes,
reported that investigators believe around $1 billion moved through
state agencies, banks and companies linked to 1MDB before eventually
finding its way into Najib's personal accounts.
The 1MDB fund has denied that any of its funds went to the prime
minister. The Attorney-General cleared Najib in January of any
corruption or criminal offences, saying the $681 million was a gift
from a member of Saudi Arabia's royal family and that most of it was
returned.
The scandal has rocked Najib's government as public outrage over the
alleged mismanagement and corruption grows.
(Writing by Praveen Menon; Editing by Bill Tarrant)
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