KUALA LUMPUR – April 7, 2016: The directors of 1Malaysia Development Berhad (1MDB) have collectively offered to resign after the much anticipated Public Accounts Committee (PAC) report was tabled in Parliament this morning.
The comprehensive and conclusive report highlighted not only the state-owned investment firm’s financial mismanagements but had also dispelled numerous allegations plaguing 1MDB.
Via a press statement, the board stated that given the findings of the report, it had decided to offer it resignation to MoF Inc., the 100% shareholder of 1MDB.
“This has been a difficult decision to take but we believe is the right thing to do, given the circumstances, in order to facilitate any follow-up investigations as recommended by the PAC,” says the statement.
The board also pointed out that more importantly, the fund of 1MDB has been fully accounted for and there is no case of “RM42 billion missing”, as alleged by some.
“It has also been confirmed that 1MDB did not transfer RM 2.6 billion to the personal accounts of the prime minister as had been alleged.
“The board has successfully steered 1MDB through a uniquely challenging period and trusts that, with the release of the PAC Report, a line has been drawn.”
Commenting on the weaknesses in governance and decision-making of 1MDB highlighted in the PAC report, the board states that it is understandable for the PAC and National Audit Department to find such lapses and shortcomings.
“However, it is important to understand that the decisions were made in the context of specific transactions at that point in time.
“1MDB is a complex company, with multiple roles of undertaking large strategic projects, establishing collaboration with foreign government entities and attracting foreign direct investments to Malaysia.
“It is now well known that 1MDB only had RM 1 million cash equity, which necessitated a heavy dependence on borrowings to fund investments.
“Notwithstanding this challenge, the board has done its best to manage the company in a way that would not be a financial burden to the government.”