Malaysia's PM Najib Razak orders independent review of state development company 1MDB's accounts

Malaysia's PM Najib Razak said that he has instructed the country's Auditor General to independently verify the accounts of state development company 1Malaysia Development Bhd (1MDB). -- PHOTO: AFP 
Malaysia's PM Najib Razak said that he has instructed the country's Auditor General to independently verify the accounts of state development company 1Malaysia Development Bhd (1MDB). -- PHOTO: AFP 

KUALA LUMPUR (AFP, Reuters) - Malaysia's Prime Minister Najib Razak said on Wednesday that he has instructed the country's Auditor-General to independently verify the accounts of state development company 1Malaysia Development Bhd (1MDB) amid allegations of shadowy deals and missing millions.

The subsequent report by the Auditor-General will undergo a transparent inspection by the Public Accounts Committee, a bipartisan unit, Mr Najib said in a statement.

"If any wrongdoing is proven, the law will be enforced without exception," said Najib, who chairs 1MDB's board of advisers.

The company has become a big political liability for the premier. It is widely reported to be struggling to pay off more than US$11 billion (S$15.03 billion) in debt, raising fears it could collapse and wreak havoc on Malaysia’s financial system.

There have been mounting calls by the government’s critics for a probe into the fund. However Najib's statement on Wednesday said the prime minister and his ministers expressed confidence “that no wrongdoing has been committed within 1MDB” after officials from the fund and its auditors Deloitte were summoned to give a briefing to the cabinet and answer queries.

It said Najib and his cabinet were told that “relevant investments of 1MDB have been returned in full with significant audited profit”.

1MDB’s president Arul Kanda said attacks on the fund were politically motivated. “These are deliberately coordinated attempts to undermine the company by spreading unsubstantiated allegations and speculation, which in turn could potentially harm the economy,” he said in a separate statement.

The political opposition has been demanding that Najib and 1MDB clarify the fund’s dealings and whether money was siphoned off to benefit those close to the premier.

Anti-graft watchdog Transparency International on Tuesday also called for an investigation. It made specific mention of a media report last weekend alleging US$700 million was diverted from a shadowy 2009 deal between 1MDB and a little-known Saudi energy firm, PetroSaudi.

Adding to Najib’s woes, a recent New York Times investigative report alleged huge wealth in his entourage and multi-million-dollar purchases of luxury US real estate by shell companies linked to an associate of Najib’s family, Jho Taek Low.

These included homes purchased by Riza Aziz, Najib’s stepson, the newspaper said.

Najib’s office has said the report raised “false allegations”.