The heavily indebted Malaysian state investment fund 1MDB has said its entire board of directors has offered to resign, after a parliamentary inquiry found extensive mismanagement and called for a police investigation into the fund’s former head.
In a report submitted in parliament on Thursday, the public accounts committee said it found 1MDB’s financial performance “unsatisfactory”. The fund’s debts ballooned from 5bn ringgit (£906m) in 2009 to 50bn ringgit this January.
It said 1MDB’s business model depended heavily on debt, mainly bank loans and bonds, part of which are guaranteed by the government. Such heavy reliance on debts for working capital should never have been allowed, the report said.
The report did not mention the prime minister, Najib Razak, who was behind the creation of 1MBD in 2009 and has been battling allegations that hundreds of millions of dollars was channeled from the fund into his personal bank accounts.
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