KUALA LUMPUR - The Public Accounts Committee (PAC) has called for the advisory board of 1Malaysia Development Bhd (1MDB) to be abolished for better management of the state investment arm.
It also found that the 1MDB board of directors had failed in its responsibility.
It said the board was found not to be proactive in scrutinising its management and keeping track of cash flow activities.
The board of directors should monitor the company's activities by questioning the prices of asset purchases and cost of debts, it said.
Prime Minister Datuk Seri Najib Tun Razak, who is also the Finance Minister, is the chairman of the 1MDB advisory board.
The committee also called for the abolition of Clause 117 of 1MDB's Memorandum and Articles of Association.
"All references to the Prime Minister should be changed to the Finance Minister to streamline with the provisions of the Ministry of Finance (Incorporated)," said the report.
The Memorandum and Articles of Association was inked in 2009, when 1MDB was known as the Terengganu Investment Authority.
The PAC also recommended that 1MDB should practise management principles as laid out by the Putrajaya Committee on High Performance GLCs and recommended that taking in excessive loans should not be allowed at all, especially when a company's cash flow was insufficient.
Police and the Malaysian Anti-Corruption Commission (MACC) are now awaiting the report to be handed over to them before they can start taking action.
Bukit Aman Commercial Crime Investigation Department director Comm Datuk Seri Mortadza Nazarene said the police were ready to co-operate with other authorities on the matter.
"However, we must wait for a detailed report to be lodged first," he said.
MACC deputy chief commissioner (Operations) Datuk Seri Mohd Shukri Abdull said the commission was still waiting for PAC to officially hand over the report.