Transparency International Malaysia calls for Investigation into 1MDB Scandal

March 3, 2015

Transparency International Malaysia calls for Investigation into 1MDB Scandal

by  The Malaysian Insider

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.

1MDB-The Scandal1MDB

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.

Najib as 1MDB advisorIt also urged Prime Minister Datuk Seri Najib Razak, who is chairman of 1MDB’s advisory board, to come clean on the fund and assure the public that their interests were safeguarded.

“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.

In a separate statement, 1MDB President and Group Executive Director ArulKanda, newly appointed president and group executive director of Malaysia's state investor 1Malaysia Development Bhd, poses for photographs in Kuala Lumpur Kanda Kandasamy also said the firm “notes with concern” the claims reported about its business arrangements with PetroSaudi.

“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.



6 thoughts on “Transparency International Malaysia calls for Investigation into 1MDB Scandal

  1. Get on with the investigation in the public interest. It is an easy decision to make if the Putrajaya has nothing to hide. Prime Minister Najib must realise that further delays will only raise the level of suspicion that there is something has gone wary. No amount of cover-up will help all concerned. Bank Negara must take the lead since some of the major local banks are exposed to 1MDB. Heads must roll too. AmBank, for example, has already dismissed its top managers to enable a clean up of the bank.–Din Merican

  2. Quite a lot of people online are already talking the end is near.. From a PR perspective when it gets this bad, its impossible to come back. If you manage to hang on, you need a real turnaround plan and he never really had a good plan despite having the winds in his favour for more than five years..

  3. Reports of malpractices and rotting have been going on for so long and yet the authorties have shown no interest in this matter. If it was an opposition state government that was involved all the watch dogs of the country would have been on the case. As far as I am concerned 1 MDB is just the tip of all that is wrong with the country and despite these calls for investigation little will be done to expose the culprits until the government itself is changed. UMNO has been in power for so long that it is simply not capable of righting any wrongdoing for fear that they may well open up a minefield. Besides ,tell me just who is capable of such a task. The police? That would be a joke. MACC? That would be a bigger joke.

  4. Nothing new in Corrupted Malaysia with dirty politicians for decades since Mahathir era. From local to foreign contracts they get “commission” by not working. It is base on pro-bumi policies laziness and greed. Money talks in Malaysia and the Public get scammed. All taxes revenues stolen to seedy pockets. UMNO is the biggest corrupted Government in the World.

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