KUALA LUMPUR - The Parliamentary Public Accounts Committee (PAC) has found that 1Malaysia Development Berhad's (1MDB) RM3.895bil (S$1.34bil) joint-venture with PetroSaudi was done without due diligence.
"The US$1bil investment by 1MDB in this joint venture was done without a due-diligence process; there are no specific details on the project stated on the proposal paper that was prepared by management and no feasibility study was done on the investment project that would be carried out," said the PAC in a 106-page report on 1MDB tabled on Thursday in Parliament.
It added that the board of directors was only told of the date of the signing of the joint-venture on Sept 18, 2009 when the joint-venture was to be signed on Sept 28, 2009.
The PAC added that other aspects of the project - such as a background check of the partner in the joint venture and the total cost of the project - were not studied in depth.
"There were four different companies that were registered under the PetroSaudi name but the approval proposal paper that was presented to the board of directors did not contain this important information. Aside from this, the joint-venture agreement contained several clauses that did not look after 1MDB's interests," said the PAC.