Committee conducts 1MDB probe

A parliamentary enquiry into 1MDB has heavily criticized the fund’s former chief executive, calling for further investigations into the former boss, while also finding no wrongdoing by Prime Minister Najib Razak.

A report by the Public Accounts Committee (PAC), laid with parliament today, also concluded the financing and performance of 1MDB was “unsatisfactory” but that the government had dealt effectively with the funds debt issues as they arose, remarking that the government’s rationalisation plan would address the fund’s issues.

The PAC also found no evidence to support claims by former Prime Minister Dr Mahathir Mohamad that RM42billion had gone missing – the claim which initially sparked the investigation – which will come as a huge blow to Mahathir, who has been campaigning to oust Najib from office.

In its recommendations, the PAC said: “The PAC is of the opinion that the former CEO of 1MDB Shahrol Azral Ibrahim Halmi has to take responsibility for those restrictions and weaknesses.”

“As such, enforcement agencies are asked to investigate Shahrol Azral Ibrahim Halmi and anyone else related … PAC also noted that the government had taken immediate steps to address its cash flow problem which started in November 2014. In January last year, a new management team was brought in and Minister of Finance Inc had given serious attention in settling the problems.”

In a statement released soon after the report’s publication, Najib said: “Following multiple grave allegations made against 1MDB, such as Tun Mahathir’s claim that RM42 billion had gone missing, the cabinet under my instruction asked the auditor general in March 2015 to conduct an independent investigation into 1MDB’s financial accounts.

“After an exhaustive process, the PAC has today released a report with its findings to Parliament. This report represents a consensus by the PAC members, and its findings are based on facts and hundreds of hours of reviews and investigations.

“Having reviewed it, I note that the PAC’s report shows that RM42 billion is not missing from 1MDB, as had been alleged by Tun Mahathir. However, the report has identified weaknesses in 1MDB’s capital structure and management. We will study and act on the report’s recommendations. We must ensure that lessons are learned, and action will be taken if any evidence of wrongdoing is found.

“Equally, it is now clear that Tun Mahathir’s allegations against 1MDB have been false. He was motivated by personal interest, not the national interest, and a desire to unseat the government.”

The report comes weeks after it was reported by the authorities that US$681 million in Najib’s accounts was a Saudi donation and not from the state fund, as Mahathir had claimed.