By ---use-custom-author-field---
While encouraging, the Auditor-General’s probe on 1MDB’s latest annual accounts will fall woefully short of clearing the controversial company’s reputation as the scope is heart-wrenchingly limited compared to the scale of the controversy surrounding it. The time has come for a more comprehensive and drastic measure: A Royal Commission of Inquiry.
______________________________________________________________________
Najib Abdul Razak
In the first piece of this latest KiniBiz series on the 1Malaysia Development Bhd (1MDB), we asked if the recent decision to allow the Auditor-General (AG) to probe the investment fund’s accounts was an adequate response to the numerous questions and concerns clouding over the fund.
The answer to that question is a resounding, no.
The time has come for Prime Minister Najib Abdul Razak to either set up a joint taskforce to investigate the entire 1MDB issue or to set up a Royal Commission of Inquiry to do the same.
Now this is neither a question of the AG’s ability or integrity; rather it has to do with the scope of what he will be investigating. It is a matter of what seems to be a glaring mismatch between the scope of the Auditor-General’s probe and the myriad concerns raised over the years on 1MDB, especially recent revelations that cast a starkly negative light on its dealings.
The AG will look into the latest 1MDB annual audited accounts which were for the 2014 financial year (FY14) and audited and signed off on by Deloitte. Following a briefing by 1MDB and Deloitte to the Malaysian Cabinet, Najib said they were convinced no wrongdoing had taken place but were nonetheless asking the AG to probe.
The PM said “if any wrongdoing is proven, the law will be enforced without exception.” That sort of fighting talk was good to hear, but the investigation has to go much deeper and further back into 1MDB.
When conducting an audit for a particular year, the team will solely focus on that particular period. Very rarely will it look beyond financial activities and transactions done before that period.
Given that Deloitte has only been 1MDB’s auditor since February 2014 and were brought in to handle the audit for the financial year 2013, this means the AG will likely only be verifying a small portion of the fund’s past.
The pressing need for such an in depth investigation has been there for over two years since reports began emerging of how there may have been wrongdoing at 1MDB. The trove of documents which Sarawak Report has been releasing over the past weeks further raises more questions especially as to who was really running 1MDB. No matter what the motivation driving the release of the documents and pages of email correspondence is, the material itself cannot go unanswered.
Jho low
It is worth noting that 1MDB has remained silent on much of the material aside from reiterating what they have repeatedly said in the past. The fund’s management seem to believe this suffices, however they have failed to convincingly answer the questions, which have only intensified.
Interestingly, Petrosaudi which is the other player which features heavily in Sarawak Report have lodged a report with UK’s Scotland Yard authorities claiming they were hacked. By doing so, they may have inadvertently confirmed the veracity of the Sarawak Report material.
Neither 1MDB, Jho Low nor Petrosaudi has came forward to declare outright that the email correspondence and documents published by Sarawak Report are false.
Shahrol Halmi
Assuming it is all authentic then there can no longer be limited investigations. A more substantive investigation must be undertaken, one that extends back to the genesis of the fund in September 2009 when the Terengganu Investment Authority became 1MDB.
From there every single deal and investment decision must be scrutinised. First and foremost, former CEOs Shahrol Halmi and Mohd Hazem and both the former and current chairmen of 1MDB, Mohd Bakke Salleh and Lodin Wok Kamaruddin must be interviewed extensively. The scope should be extended to include the directors.
Mohd Hazem Abdul Rahman
On their heels should be 1MDB’s chief financial officers and chief investment officers, and anyone else who has had high level decision making authority in 1MDB’s relatively short but controversial past.
Outside consultants must also be interviewed and this inevitably brings us to the young billionaire Jho Low.
He has maintained that he was never hired by the fund and that he has not received any compensation directly from 1MDB, TIA or the government. He explains his connection by saying his knowledge is much sought after and all he has ever done is offer his advice.
Email correspondence published by Sarawak Report has indicated a much higher level of participation. His discussions with the various players involved in deals undertaken by 1MDB stands in stark contrast to his repeated denials.
Mohd Bakke Salleh
The tycoon paints himself as nothing more than an occasional consultant and a magnanimous one at that, given he says he has never been “directly compensated”. Even if he is being untruthful it will be hard to prove.
Nonetheless, even the advice he offered should be scrutinised. Because there is a fine line between giving companies advice on how take advantage or even circumvent a nation’s regulatory requirements, and telling them how to break the rules altogether.
Lodin Wok Kamaruddin
Moral ethics aside, if Jho Low has only done the former, then he has not broken the law. However given the fine line, it will not hurt for the Malaysian authorities to investigate. Jho Low has said he would participate in any investigations, it is time to take him up on the offer.
Far from being a witch-hunt such an in depth investigation is needed because the controversy over 1MDB is rapidly becoming bigger than just being about its financials.
As multiple reports have emerged from the local press and foreign outlets like the New York Times linking Jho Low, 1MDB and the prime minister and implicating all three in questionable behaviour – the controversy has ballooned from being over an investment fund to dragging in a key Malaysian institution.
Implications aimed at tainting the prime minister by extension taints his office, especially when there are suggestions of abuse of power on improper conduct. The prime minister then must take action to not just clear his name but to protect the dignity and integrity of his office.
The best and only way to do this is a full and comprehensive review of 1MDB. If the investigations are done half-heartedly, it will be painfully obvious and it will further erode the people’s confidence in Malaysia’s regulatory institutions.
There is no better time then now to end the controversy and intrigue surrounding 1MDB by appointing a Royal Commission of Inquiry with full powers to investigate, recommend prosecutions where necessary and detail measures to get restitution for losses.
Yesterday: On the trail of 1MDB’s billions, again
You must be logged in to post a comment.