Malaysia: directors of scandal-hit 1MDB state investment fund offer mass resignation

Parliamentary inquiry finds extensive mismanagement but does not mention PM Najib Razak, who was behind creation of debt-laden fund.

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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Opponents of Malaysian PM join hands to oust him

Leaders from across Malaysia's political spectrum and hundreds of their supporters led by former longtime Prime Minister Mahathir Mohamad have rallied in Kuala Lumpur, calling for the removal of the current prime minister over a $700m corruption scandal.

Opponents of Najib Razak said on Sunday that they planned to petition the country's Islamic royalty seeking the removal of the scandal-plagued prime minister, who has been mired into graft allegations to the tune of $700m.

"(Najib's) leadership undermines the very existence of our institutions," said 90-year-old Mahathir, who dominated Malaysia as prime minister for 22 years before retiring in 2003.

"We want the rule of law, and the actions of Najib have destroyed it. He no longer deserves to be the prime minister," Mahathir said at the gathering attended by leaders from the ruling party, opposition and civil society.

The highly unusual grouping of heavyweights from both from the ruling party and the opposition groups was formed in early March, when it issued a call to "save" Malaysia from disaster by removing Najib.

Former deputy prime minister Muhyddin Yassin and Democratic Action Party senior leader Lim Kit Siang were to speak at the gathering as well, the DPA news agency reported.

Jailed opposition leader Anwar Ibrahim has endorsed the movement, despite a history of conflict with Mahathir.

Najib has been under pressure to resign since July, after the Wall Street Journal newspaper suggested that nearly $700m in his bank accounts came from the state-funded 1Malaysia development fund.

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Malaysia 1MDB scandal: Singapore seizes bank accounts

The authorities in Singapore say they have seized a large number of bank accounts as part of an investigation into possible money-laundering linked to a fund owned by the Malaysian state.

The fund is called 1Malaysia Development Berhad (1MDB).

It was established in 2009 to pay for major new economic and social developments in Malaysia.
Singapore said it would not tolerate being used as a refuge for illicit funds.

In a joint statement by its central bank and the police's anti-fraud agency it said: "In connection with these investigations, we have sought and are continuing to seek information from several financial institutions, are interviewing various individuals, and have seized a large number of bank accounts.

"Singapore is also cooperating closely with relevant authorities, including those in Malaysia, Switzerland and the United States."

Last year, officials in Singapore froze two bank accounts as part of its investigation.

The announcement follows news that around $4bn (£2.8bn), earmarked for investment in economic and social development projects in Malaysia, may have been misappropriated from state-owned companies.

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It stems from Prime Minister Najib Razak's strategic state fund called 1Malaysia Development Bhd (1MDB) set up in 2009 when he came into office. The fund is meant to turn Kuala Lumpur into a financial hub.

It started to attract national attention in early 2015 when it missed payments for the $11bn (£7.1bn; €9.9bn) it owed to banks and bondholders.

Former Prime Minister Mahathir Mohamad has said the fund has taken on too much debt and lacks transparency. He has also criticised Mr Najib's family's "lavish" lifestyle, which has been regularly discussed in the local press.

Then the Wall Street Journal (WSJ) reported it had seen a paper trail that allegedly traces close to $700m from the troubled fund to Mr Najib's personal bank accounts.

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NEW 1MDB BOMBSHELL - Second Jho Low Company Paid Hundreds of Millions To Both Najib Razak AND Khadem Al Qubaisi - EXCLUSIVE!

Sarawak Report can reveal that a second Jho Low company, Blackstone Asia Real Estate Partners Limited, has paid hundreds of millions of dollars into the personal accounts of both the Malaysian Prime Minister, Najib Razak and also the ex-Chairman of Abu Dhabi’s Aabar fund, Khadem al Qubaisi.

Aabar, a subsidiary of the IPIC sovereign wealth fund, has been enmeshed in a series of highly questionable and loss making deals with the scandal-torn Malaysian development fund 1MDB, which is directly controlled by Razak, using Jho Low as his proxy.

A Sarawak Report investigation has established that Blackstone, a BVI registered company which gives an address in Singapore, has been cited as the sender of a series of enormous dollar currency payments to both men between 2011 and 2012.  Our information includes telegraphic transfer documents passed through the American banking system.

The off-shore company uses a tactic familiar to watchers of Jho Low, in that it apparently seeks to give the impression that it is associated with the US global investment giant, the Blackstone Group. However, there is no link whatsoever between the legitimate multi-national and this secretive shell company.

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