A Malaysian parliamentary inquiry yesterday accused the board of state fund 1Malaysia Development Bhd (1MDB) of being irresponsible and urged a probe into its former chief, but stopped short of implicating Malaysian Prime Minister Najib Razak, who was an adviser for the troubled firm.
The parliament’s Public Accounts Committee (PAC) said senior 1MDB management withheld crucial information from the board and made transactions without its knowledge or approval.
The bipartisan PAC is the first Malaysian entity to level allegations against 1MDB, which is at the center of corruption and money-laundering investigations in the US, Switzerland, Singapore and Luxembourg.
US Department of Justice officials have asked Deutsche Bank AG and JPMorgan Chase & Co to provide details on their dealings with 1MDB, as the global investigation into 1MDB widens. Goldman Sachs’ relation with 1MDB is also under review.
The 1MDB fund, which had piled up more than 42 billion ringgit (US$10.73 billion) in debt since its inception in 2009, said its board of directors collectively offered their resignations after the report.
The parliamentary report said former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi has to take responsibility.
“As such, enforcement agencies are asked to investigate Shahrol Azral Ibrahim Halmi and anyone else related,” the report said.
The report also called for the advisory board of the fund — chaired by Razak — to be abolished and any reference to the prime minister be changed to finance minister in the company’s memorandum and articles of association.
Najib, who founded 1MDB in 2009, was not otherwise named in the report.
Najib has consistently denied any wrongdoing.
He said the report showed that former Malaysian prime minister Mahathir Mohamed’s allegations against him were false.
Mahathir quit the ruling party in February and has stood with the opposition in calling for Najib to resign over the 1MDB scandal.
The scandal has fueled a sense of crisis in a country under economic strain from slumping oil prices and a prolonged slide in its currency last year.
Shortly after the report was released, Malaysian opposition leader Tony Pua, who was part of the PAC, told a news conference that Najib should at least be held culpable for the mismanagement at the fund.
“Anything else we do not know, as we do not have the overseas bank statements of 1MDB,” Pau said.
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