Scepticism over official audit of IMDB

Scepticism over official audit of IMDB

Despite Prime Minister Najib Razak ordering a review of 1Malaysia Development Berhad's (1MDB) books, questions remain over the scope of the Auditor-General's probe into the indebted state-owned investment agency.

Opposition stalwart Lim Kit Siang noted that the Prime Minister's Office said the "Cabinet expressed confidence that no wrongdoing has been committed within 1MDB" even before the review had begun.

"The Cabinet choreography (is) to forestall any questioning" when Parliament reopens on Monday by "declaring that any questions about 1MDB should be put in abeyance" until the audit has been completed, he said in a statement yesterday.

No details of the timespan and scope of Auditor-General Ambrin Buang's review on 1MDB have been made public. He did not respond to requests for clarification.

1MDB has chalked up RM42 billion (S$15.7 billion) in debt in five years, more than a third of which is government-guaranteed.

Critics are calling for incriminating documents by whistle-blower site Sarawak Report - which point to at least US$700 million (S$957 million) being siphoned out of the company - to be included in the review.

Once the review is completed, it will be handed over to the Parliament's Public Accounts Committee (PAC).

The whistle-blower site said a joint venture between the Saudi Arabia-based PetroSaudi International (PSI) 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.

A 1MDB spokesman told The Straits Times the documents were unreliable and PSI had lodged a police report questioning their veracity.

1MDB president Arul Kanda said in a statement on Wednesday he welcomed the review by the Auditor-General and said unsubstantiated allegations against the firm were politically motivated.

Opposition lawmaker Tony Pua, one of 1MDB's most vocal critics, has vowed to summon 1MDB executives and auditors once the matter is before the PAC, of which he is a member.

Financial analysts were also unmoved by Datuk Seri Najib's move to verify the accounts of the firm, of which he is chief adviser.

"Investors are of the opinion that there is no separation of powers. The A-G stepping in is viewed as another ill-conceived public relations stunt," Mr Victor Liew, a managing consultant at a local investment bank, said.

Separately, Reuters reported that 1MDB will be left as a skeletal structure and possibly dissolved under a debt repayment plan in which most of its assets will be sold, sources with direct knowledge of the matter said.

shannont@sph.com.sg


This article was first published on March 06, 2015.
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