KUALA LUMPUR - Without naming names, the central bank has disclosed that it raised concerns on a "highly leveraged entity" over the past two years to the relevant authorities.
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said the central bank had been monitoring the entity during its yearly assessment of the financial system and had carried out an "informal investigation".
Asked why the central bank only opened up a formal investigation in June this year into 1Malaysia Development Bhd (1MDB), Zeti said the entity had already caught its attention earlier.
"We monitored them, we engaged with them, and for two years actually, and we wrote and submitted reports on them," she told a packed press briefing yesterday.
Zeti, who took care not to mention the name 1MDB, said a "leveraged entity" would be assessed during the yearly meeting to determine whether the debts it carried posed a risk to the financial system.
She explained that a Monetary Policy Committee and a Financial Stability Committee under the central bank look into "highly leveraged entities" that represent risks.
"So, when we look at a highly leveraged entity it represented a concern.
"And we did highlight that to various authorities that should be aware of it and we wrote reports on it. We monitored and engaged with the entity itself throughout this period," she said.
Zeti said among other things, these committees looked at household debts and all other areas that represent risks.
She added that the investigation focused on the company's foreign and international investment activities.
Zeti explained that Bank Negara conducted a formal investigation after it became part of the special taskforce in June.
"The investigation was a long one because it was a complex process.
"We conducted our formal investigations by taking statements from various people involved and looking at thousands of documents. We worked round the clock. Now it's been completed," said Zeti.
The investigation papers have been forwarded to the new Attorney-General, Tan Sri Mohd Apandi Ali.
"The bank has submitted its investigation papers to the A-G, with recommendations for appropriate action. And I want to reiterate that the bank is prohibited by law to publicly discuss any detail of the investigation.
"If we are called by the Public Accounts Committee (PAC), then that is the only other avenue where the bank will be able to respond to questions on this investigation," stressed Zeti.
The PAC hearings, however, have been temporarily suspended because its chairman, Datuk Seri Nur Jazlan Mohamed, and three other members are no more backbenchers after being appointed as a minister and deputy ministers in the recent Cabinet reshuffle.
A special task force comprising the Malaysian Anti-Corruption Commission, Bank Negara and the police was set up in June to investigate 1MDB's operations and its accumulated RM42bil debt.
The task force, however, was disbanded on Aug 5 after Mohd Apandi took over from Tan Sri Abdul Gani Patail. The three agencies were then ordered by Mohd Apandi to work independently.