KUALA LUMPUR, June 3 — Malaysia’s central bank said today it has launched a formal enquiry into state fund 1MDB and issued a legal directive for information to examine whether there had been any violation of its rules.

1MDB, a property-to-energy group whose advisory board is chaired by Prime Minister Datuk Seri Najib Razak, has been dogged with controversy over nearly RM42 billion (US$11.5 billion) in debt and alleged financial mismanagement.

Najib ordered an audit of 1MDB’s accounts by the country’s Auditor General earlier this year.

“With respect to 1MDB, a formal enquiry has commenced to examine any contravention of the central bank’s rules and legislation,” Bank Negara Malaysia said in a statement.

“This has involved the issuance of a legal directive requiring information from the entity,” it said.

The central bank said it has also taken statements from individuals involved in the governance of 1MDB, but did not elaborate.

Its move comes just weeks after the Monetary Authority of Singapore (MAS) said it was in touch with Malaysia’s regulators over an investigation into the fund.

Bank Negara said it had forwarded information from foreign authorities to the relevant investigation agencies.

Failure to meet its request for information from the board and the management could result in a fine of up to RM50 million or up to 10 years in prison or both, it said.

The bank said it launches a formal investigation when money approved by the bank was not used for the purpose indicated or when false information is provided, or if there was a failure to comply with the conditions of approval.

Earlier today, 1MDB released details of its RM42 billion debt, to counter allegations that some of the funds were missing.

In a statement breaking out the expenditure, 1MDB said that about RM18 billion was spent on the purchase of independent power plants (IPP) and about RM15.4 billion went into investment funds. It spent about RM1.7 billion to purchase land assets and RM5.8 billion was listed as financial expenditure.

The company said it holds about RM900 million in surplus cash.

1MDB completed a strategic review of its operations earlier this year and said it planned to sell assets and development rights in prime property projects to cut debt. It is said to be planning an initial public offering for its energy unit. — Reuters