Cabinet absolution of 1MDB preempts federal audit, says PAC member

KUALA LUMPUR, March 5 —The Cabinet’s decision to clear 1 Malaysia Development Bhd (1MDB) of “any wrongdoing” is premature when the Auditor General has not started his evaluation of the state investor, said a parliamentary Public Accounts Committee member.

Although Petaling Jaya Utara MP Tony Pua lauded the decision to order a federal audit of the firm, he said it was impossible for the Cabinet to come to such a conclusion based only on a briefing by 1MDB and its own auditors yesterday.

“How can the Cabinet listen to 1MDB and its external auditors for less than two hours, without listening to any other parties and immediately accept all the explanations without question?” he said in a statement.

“After all, if 1MDB was managed so well, why has the company accumulated more than RM42 billion in debt and had to beg local tycoon Tan Sri Ananda Krishnan for a RM2 billion emergency loan?”

Pua said the Cabinet should not have taken it upon itself to exonerate 1MDB of the allegations surrounding it if the ministers found the financial information contained in recently leaked documents to complex to comprehend.

Yesterday, Prime Minister Datuk Seri Najib Razak ordered the Auditor General to conduct an independent check on 1MDB’s accounts and prepare a report for the PAC to further examine.

The state-owned firm yesterday also said it will comply with the audit.

1MDB came under criticism after a British paper, The Sunday Times in collaboration with whistleblower site Sarawak Report, ran an exposé last Sunday on Malaysian business magnate Low Taek Jho and his alleged links to 1MDB’s venture with oil exploration and production firm PetroSaudi International.

The series of reports cited details purportedly gleaned from thousands of leaked documents and emails involving 1MDB.

In the exposé, Sarawak Report accused the Malaysian tycoon popularly known as Jho Low, of siphoning off US$700 million (RM2.5 billion) from 1MDB and using PetroSaudi as a “front” in a 2009 joint-venture.

Petrosaudi has denied the claim.

In The Sunday Times report, Putrajaya suggested the possibility of “political motivation” behind criticism of 1MDB, but pledged action in accordance with Malaysian law should there be any proof to back allegations of wrongdoing in the firm’s operations.