March 3, 2015
Transparency International Malaysia calls for Investigation into 1MDB Scandal
by The Malaysian Insider @www.themalaysianinsider.com
Pressure is mounting on Putrajaya as anti-graft organisation Transparency International Malaysia (TI-M) has joined in the calls for an investigation into 1Malaysia Development Berhad (1MDB), the government-owned strategic investment fund embroiled in a financial scandal.
TI-M said a “special high level task force” was needed to probe the debt-ridden 1MDB, adding that an audit of its accounts by the Auditor-General’s Office would not suffice as its financial irregularities had drawn international attention and cast doubts over Putrajaya’s commitment to transparency and accountability.
“Furthermore, 1MDB’s finances are high level issues of public importance as well as of national interest as it involves tax payers’ money and the potentially consequential damaging impact that it poses to the banking system and the nation’s economy.
“TI-M calls for the immediate formation of a special task force comprising agencies such as Commercial Crime Division of Police, Auditor’s General Office, Bank Negara Malaysia, Ministry of Finance and Malaysian Anti-Corruption Commission to investigate 1MDB’s finances,” said TI-M in a statement.
It suggested that 1MDB’s former auditors, Ernst & Young and KPMG, be included in this task force as their “unexpected withdrawal” could provide explanations and leads into the investigation.TI-M said the collaboration of these various agencies were necessary, given the complicated nature of 1MDB’s financial transactions.
It said the task force must have the power to call relevant organisations and individuals to assist in its investigation.”It may uncover a plethora of larger issues such as corporate crime, embezzlement, corruption, misappropriation, mismanagement of funds, inappropriate decision making and unethical behaviour including and not limited to misuse of public office,” said TI-M.
“Hence, it is timely for the government to prove its seriousness with this issue and act in a decisive and transparent manner. Less, the perception of corruption is not a misperception,” said TI-M.
Last weekend, whistleblower website Sarawak Report claimed to have obtained documents revealing that Malaysian businessman Low Taek Jho, or Jho Low, had orchestrated the 2009 joint venture between 1MDB and PetroSaudi International (PetroSaudi). It claimed Low did this so that PetroSaudi could act as a “front” for him to siphon US$700 million (RM2.5 billion) from the deal.
Sarawak Report’s expose has received international attention and prompted opposition politicians and anti-corruption organisations here to call for an investigation into 1MDB’s accounts.
However, 1MDB and PetroSaudi have denied any irregularities in their finances, while Najib said he would not allow anyone to misappropriate public funds in the government-owned company for personal gain.
“1MDB, as a corporate citizen, has a role to play and must exercise their professional obligations both to their client and society even though 1MDB has repeatedly stated that its finances are in order,” said TI-M today.
On Sunday, PetroSaudi denied reports that funds from 1MDB went to third parties, adding that its subsidiaries had received the entire cash for a joint-venture company, while 1MDB confirmed that it received back its investment in full from the deal, besides making a profit.
The privately-owned oil exploration and production company in a statement said that upon 1MDB’s exit, PetroSaudi had paid the Malaysian strategic investment fund in full and both parties no longer had any financial or legal relations.
1MDB’s audited accounts as at March 31, 2014, shows that the company received the US$2.3 billion and made a profit of US$488 million.
“1MDB exited the relationship in 2012, and received back its investment in full, with a profit of US$488 million.These facts, and all details related to this transaction, may be verified by reference to our audited accounts, which are publicly available on the Suruhanjaya Syarikat Malaysia website,” he said.
On February 21, Arul Kanda also said the same, in response to earlier criticism about 1MDB’s joint venture with PetroSaudi.