Mahathir: 1MDB problem worse than we thought
He says the government will reach out to authorities in Switzerland, the US, Singapore and other jurisdictions to recover funds diverted from 1MDB.
Dr Mahathir said he had been briefed by the police and the auditor-general on the investment fund.
KUALA LUMPUR: Prime Minister Dr Mahathir Mohamad said more wrongdoing occurred at state fund 1MDB than was publicly known, as he accelerates efforts to reopen a probe into the scandal-plagued company and the actions of his predecessor.
The government will reach out to authorities in Switzerland, the US, Singapore and other jurisdictions as it attempts to recover funds that were diverted from 1MDB, Mahathir told reporters on Wednesday.
A declassified Auditor-General report on Tuesday did not bring massive surprises, and did not mention former PM Naj ib Razak by name.
But it showed investigators had expressed widespread concern about anomalies in 1MDBâs accounts and said officers acted on investments against or without full knowledge of the board of directors on several occasions.
âThe main issue is of corruption, particularly 1MDB as well as the money that was embezzled by the previous government,â Mahathir said.
âI have been briefed by the police and the auditor-general and it is very clear that there were more wrongdoings committed than what was known by the public and me.â
1MDB, set up in 2009 to fund domestic infrastructure projects and whose advisory board Najib once chaired, didnât submit management accounts for the year ended March 2015 and bank statements from foreign financial institutions.
The audit team said it couldnât access computers, notebooks and servers at 1MDB for the purpose of crosschecking and analysing its findings.
âOverall, corporate governance an d internal controls in 1MDB were less than satisfactory,â the summary said.
âSome actions by 1MDBâs management and decisions by the board of directors were carried out in a manner that wasnât proper.â
The audit report on 1MDB had been protected since 2016 by the Official Secrets Act.
Mahathirâs move to release it comes as he seeks to tighten the net around Najib, whom he defeated in an election last week, and other officials over the multi-billion dollar scandal surrounding the fundâs actions dating back some years.
Mahathir has barred Najib from leaving Malaysia in the meantime.
âThere is an aggressive push by the new administration to reopen criminal investigations on 1MDB against the former PM as well as other individuals,â said Nizam Ismail, head of regulatory practice at RHTLaw Taylor Wessing LLP in Singapore.
âIf there are new transaction trails being uncovered in Malaysia, this could impact financial institut ions which had been involved in the money flows, in Singapore, Switzerland and beyond.â
Mahathir, who was once Najibâs mentor and ally and who is back in power after a prior stint as PM from 1981 to 2003, accused him repeatedly on the campaign trail of being a âthiefâ over alleged graft at 1MDB.
Najib has denied any wrongdoing and was cleared by the attorney-general at the time, while the fund has repeatedly denied any misconduct.
The 1MDB scandal spawned global probes as investigators tracked a money trail stretching from Switzerland to Singapore and the US. The Department of Justice alleges that US$3.5 billion from the fund went missing.
Malaysian financier Low Taek Jho has been ordered by a US court to turn over his US$250 million yacht âEquanimityâ to the US authorities who plan to sail it from Indonesia and sell it in the US.
The yacht is among more than US$1.5 billion in assets that the US c laims Low and his accomplices acquired with money they siphoned from 1MDB.
The declassified report found, among others things, that 1MDB used RM288 million ringgit of government funds to pay interest on its debt, which went against the moniesâ original purpose.
1MDB raised RM3.98 billion from domestic debt and sukuk issuance, of which only RM246 million was invested in two property projects, while RM2.16 billion was advanced to the company. 1MDB said in March all its funds were fully accounted for.
Swiss prosecutors said Tuesday they wanted to start talks with investigators in Malaysia as soon as possible to better coordinate various criminal probes into the sprawling case.
The Office of the Attorney General of Switzerland âis very much interested in renewing dialogue with the competent authorities in Malaysiaâ and âfavours an exchange between partnering authorities at their earliest convenienceâ, it sa id in an email.
Singapore authorities also weighed in. The city-state has cooperated extensively with their Malaysian counterparts on past requests on the matter and is ready to extend further assistance, the Monetary Authority of Singapore and the Commercial Affairs Department said in an email early Wednesday.
Swiss Attorney-General Michael Lauber has been publicly critical of the lack of cooperation his team of prosecutors got from Najibâs government.
Singapore has punished banks over lapses related to 1MDB, seized assets and jailed bankers over the scandal.
Source: Google News