PRESS STATEMENT, 03 March 2015, KUALA LUMPUR – Transparency International Malaysia (TI-M) strongly urges our government to set up a special high level task force to conduct a full investigation into the numerous allegations of massive billion ringgit financial and commercial crime scandal involving 1Malaysia Development Berhad (1MDB) and a little known oil company. It was reported that a USD$700 million “loan” was supposedly repaid to a little known oil company after entering into a US$2.5 billion joint venture agreement.
Almost a year ago, on 22nd February 2014, TI-M has had issued a similar press statement urging 1MDB not only to be more transparent in its corporate reporting but also must be reported in a timely manner, demonstrate greater transparency, accountability, maintain high standards of accuracy and completeness in its records. Failure to do so may contribute to a negative impact on the perception of corruption in our country, Malaysia.
While TI-M commends Public Accounts Committee (PAC) for requesting the Auditor General’s office to conduct a detailed audit of 1MDB’s financial operations but this is rather insufficient as the perception surrounding 1MDB’s finances have drawn much internationally attention, and raise questions about the Malaysian government’s commitment to pursuing transparency and accountability. Furthermore, 1MDB’s finances are high level issues of public importance as well as of national interest as it involves tax payers’ money and the potentially consequential damaging impact that it poses to the banking system and the nation’s economy.
TI-M calls for the immediate formation of a special task force comprising agencies such as Commercial Crime Division of Police, Auditor’s General Office, Bank Negara Malaysia, Ministry of Finance and Malaysian Anti-Corruption Commission to investigate 1MDB’s finances. Such financial transactions as reported can be highly complicated and requires a high degree of expertise in the investigation process. Moreover, there are various angles to be looked into, requiring the collaboration of expertise from these various agencies to determine the truth and possible negative impact and the mosaic of fabric of this commercial crime scandal. Thus, Ernst & Young and KPMG should be included in this task force as they were the external auditors of 1MDB prior to withdrawing their services to 1MDB. Reasons for their unexpected withdrawal as external auditors could provide explanations as well as penetrating leads into such an investigation.
1MDB, as a corporate citizen, has a role to play and must exercise their professional obligations both to their client and society even though 1MDB has repeatedly stated that its finances are in order.
Hence, it is appropriate and timely that this special task force be formed to look into this issue in a comprehensive and transparent manner. And the task force must have the power to call relevant organizations and individuals to assist in its investigations so as to leave no stone unturned. It may uncover a plethora of larger issues such as corporate crime, embezzlement, corruption, misappropriation, mismanagement of funds, inappropriate decision making and unethical behaviour including and not limited to misuse of public office.
Given the publicly quoted financial and governance dimension that is currently enveloping the 1MDB entity and its umbilical cord relationship with the Government of Malaysia, TI-M urges that the Ministry of Finance and its Minister who is also the Prime Minister to come clean to assure the Rakyat’s interest, both deferred and present monetary liability, is safeguarded at all cost and time. Hence, it is timely for the government to prove its seriousness with this issue and act in a decisive and transparent manner. Least, the perception of corruption is not a misperception.
End.
Dato’ Akhbar Satar
President
TI-Malaysia
Transparency International-Malaysia is an independent, non-governmental and non-partisan organisation committed to the fight against corruption.
Website: www.transparency.org.my
