Prime Minister Najib Razak yesterday ordered a review of the controversial 1Malaysia Development (1MDB) after repeated allegations of abuse of public funds and pressure on the debt-laden state investment vehicle to open its books.
But the government insisted that the "strategic investment" agency - whose board of advisers is chaired by Datuk Seri Najib - had committed no wrong despite critics producing alleged internal documents and e-mail showing at least US$700 million (S$954 million) had been siphoned off the company.
1MDB and its audit firm Deloitte briefed the Cabinet yesterday, saying "investments of 1MDB have been returned in full with significant audited profit", the Prime Minister's Office said in a statement.
"The Cabinet expressed confidence that no wrongdoing has been committed within 1MDB," the statement said.
It added that Mr Najib ordered the Auditor-General to verify the accounts of the state- owned firm that had racked up RM42 billion (S$15.8 billion) in debt in just five years, a third of which is guaranteed by the government.
The audit report will then be inspected by Parliament's Public Accounts Committee - a bipartisan body chaired by a lawmaker from Mr Najib's ruling Umno - which had warned last week that it would probe 1MDB's dealings if the Auditor-General failed to act. "If any wrongdoing is proven, the law will be enforced without exception," Mr Najib said.
Whistle-blower site Sarawak Report had claimed a joint venture between the Saudi Arabia- based Petrosaudi International and 1MDB was a front to channel funds to a firm allegedly owned by Mr Low Taek Jho, a businessman who has been repeatedly linked to the Prime Minister and his family.
The government's statement comes after repeated calls for an investigation into 1MDB.
In his response yesterday, 1MDB president Arul Kanda "welcomed" the review by the Auditor-General, calling "unsubstantiated" allegations against the firm "politically motivated".