Reaction to a parliamentary panel's report on the financial affairs of troubled state investor 1Malaysia Development Berhad (1MDB) was, not surprisingly, along partisan lines.
Malaysian Prime Minister Najib Razak, who has found himself at the centre of allegations of financial impropriety at 1MDB, claimed the report tabled to Parliament yesterday showed that allegations of missing billions from the company - whose advisory board he chairs - were untrue. He referred specifically to allegations by former premier Mahathir Mohamad.
Datuk Seri Najib acknowledged weaknesses in 1MDB's management and said the government would study the report's recommendations. "We must ensure that lessons are learnt, and action will be taken if any evidence of wrongdoing is found," he added.
The Public Accounts Committee (PAC) had based its probe on the Auditor-General's review of 1MDB's books, which found the company's debt to have soared to over RM50 billion (S$17.2 billion) by January.
The panel laid the blame for 1MDB's problems on former chief executive Shahrol Azral Ibrahim Halmi and his management team.
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Key findings
- •As of January this year, 1MDB's debt stood at RM50 billion (S$17.2 billion), compared with assets of RM53 billion. Within its 2014/2015 fiscal year, the company spent RM3.3 billion on payment of interest incurred upon its debt.
•The Public Accounts Committee (PAC) called for 1Malaysia Development Berhad's advisory board to be abolished for better management of the state investment arm.
•The PAC found that former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi should be held responsible for the "weaknesses and constraints" faced by the firm. The panel urged the authorities to investigate Datuk Shahrol and others in the management.
• The management of 1MDB acted without the approval of the board of directors in the joint venture with PetroSaudi International. The RM3.895 billion joint venture was done without due diligence.
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1MDB said its entire board had offered their resignations yesterday, while Datuk Shahrol insisted "there was no wrongdoing or illegal activity at the company under my watch".
"I will continue to extend my full cooperation, confident in the knowledge that I have done no wrong and have nothing to hide," he said in a statement.
The opposition, for its part, said the findings showed that Mr Najib could not claim ignorance of the company's troubles.
"PM knew the deals absolutely because he signed all these deals. Because 117 actually is the key link... to implicating the Prime Minister. At the very least, he should be held ministerially accountable," PAC member Tony Pua told a press conference.
He was referring to Clause 117 of 1MDB's memorandum and articles of association, which states that the Prime Minister must give his written approval for any company deal.
Dr Mahathir scoffed at the PAC's conclusion that Mr Shahrol was solely to blame, as "he didn't found 1MDB". He told reporters: "1MDB was started by Najib and he is the adviser. Nothing can be done without his (Mr Najib's) agreement, so why punish this man?"
Deputy Prime Minister Ahmad Zahid Hamidi said 1MDB's problems should not be politicised further, as the PAC had found "no hidden hands" acting behind the scenes. He added that it was up to the police to investigate the matter.
Police chief Khalid Abu Bakar confirmed they would study the findings "in depth to ascertain any elements that require further investigation and action".
PAC chief Hasan Arifin said the panel found "1MDB's capital structure was overly dependent on borrowings". But he added that "PAC is satisfied with... 1MDB's rationalisation plan and steps taken by the government in the short term for the company's recovery".
Auditor-General Ambrin Buang told Malay Mail Online that the federal audit report on 1MDB was still classified despite the release of the PAC report.
*Additional reporting by Trinna Leong and Eunice Au
