KUALA LUMPUR, May 26 — The prime minister has the final say over any “financial commitment” undertaken by 1 Malaysia Development Berhad's (1MDB) precursor, Terengganu Investment Authority (TIA), according to TIA's Memorandum and Articles of Association agreement.
Clause 75 of the agreement states that the management of the company and the determination of overall investment policies or decisions lies with the board of directors.
1MDB was incorporated in 2009, after Prime Minister Datuk Seri Najib Razak announced the decision to turn TIA into a federal agency.
Clause 117 of the agreement inked on February 27, 2009, indicates that the prime minister must give his written approval for any of TIA’s deals, including the firm’s investments or any bid for restructuring.
The clause states that for any avoidance of doubt, none of three things can be executed “without the written prior approval of the prime minister”.
This includes “any financial commitment (including investment), restructuring or any other matter which is likely to affect the guarantee given by the Federal Government of Malaysia for the benefit of the company, national interest, national security or any policy of the Federal Government of Malaysia”.
The clause also stipulates that the government shall have the “final and conclusive” right to determine what constitutes national interest and national security.
Other matters which need the PM’s approval are amendments to the company’s Memorandum and Articles of Association of the Company and appointments and removal of directors and senior management team of TIA.
The document was made available to Malay Mail Online.
The Auditor-General and Parliament’s Public Accounts Committee (PAC) are currently investigating 1MDB, a state-owned firm that has reportedly amassed debts of some RM42 billion in just six years since it was incorporated in 2009.
1MDB chief Arul Kanda Kandasamy and former CEO Datuk Shahrol Ibrahim Halmi sparked outrage recently when it was revealed that they would not be testifying before the PAC today.
But Arul Kanda later reiterated their commitment to cooperate with the PAC investigation and said they were working on finalising another date to appear before the committee.
Malay Mail Online is attempting to obtain a copy of 1MDB's Memorandum and Articles of Association agreement.