Malaysia's 1MDB slams WSJ's use of confidential documents

Men walk past a 1 Malaysia Development Berhad (1MDB) billboard at the funds flagship Tun Razak Exchange development in Kuala Lumpur, Malaysia, on March 1, 2015. --
Men walk past a 1 Malaysia Development Berhad (1MDB) billboard at the funds flagship Tun Razak Exchange development in Kuala Lumpur, Malaysia, on March 1, 2015. --PHOTO: REUTERS

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - 1Malaysia Development Bhd (1MDB) has criticised the Wall Street Journal for using confidential information from a parliamentary committee probe, which is yet to be presented to Parliament.

"We are shocked that a reputable publisher such as the Wall Street Journal would make use of clearly confidential information in its reporting.

"We refer specifically to the WSJ confirming it has reviewed a 'transcript of the proceedings', from a parliamentary committee probing 1MDB, of which the only possible source is the Public Accounts Committee (PAC) hearings on 1MDB.

"The Standing Orders of the Malaysian Parliament very clearly states that 'the evidence taken before any Select Committee and any documents presented to such Committee shall not be published by any member of such Committee, or by any other person, before the Committee has presented its Report to the House'," 1MDB said in a statement on Wednesday (Sept 9).

It said the actions by WSJ were a potential breach of Malaysian law by a supposedly respectable foreign publication.

"We are further concerned as to who involved in the PAC hearings may have leaked this transcript, which is clearly an attempt to prejudice the PAC investigations and deny 1MDB its right to due process as provided for by the laws of Malaysia.

"1MDB strongly urges the relevant authorities to investigate this matter thoroughly and take all requisite action to preserve the process integrity and Standing Orders," it said on Wednesday.

1MDB further stated that WSJ, in the article relating to US$1.4 billion (S$2 billion) of payments made by 1MDB, made no mention of its source and did not provide any proof of the unproven allegations it is making, thereby seriously discrediting its sensationalist story.

"1MDB cannot speak on behalf of Aabar or IPIC nor can we comment on the accounting arrangements of third parties.

"What we can confirm is that the 1MDB audited financial statements clearly describe the amount and purpose of the payments, which for the avoidance of doubt, is structured as a deposit (ie. a financial asset belonging to 1MDB and not an expense to 1MDB).

"Secondly, based on those payments, we can confirm that IPIC did provide and continues to provide guarantees for the principal and interest of 2 x US$1.75 billion bonds issued by 1MDB, with a total principal and interest amount of approximately US$5.5 billion.

"Thirdly, we can confirm that 1MDB auditors, Deloitte, made specific and detailed enquiries on these payments prior to signing off on the 1MDB audited accounts.

"Fourthly, Deloitte has strongly defended its methodology and audit process of 1MDB at the PAC hearings, a bipartisan select committee of the Malaysian Parliament. Accordingly, the Wall Street Journal is wrong to state 'it isn't clear what happened to the funds', at least not from a 1MDB perspective," it said.

WSJ reported that the US$1.4 billion that 1MDB claimed to have paid to a United Arab Emirates state investment vehicle had allegedly gone missing.

It was reported that sources said UAE are asking questions on the US$1.4 billion which is said to have never reached their investment fund, the IPIC.