Govt audit criticises Malaysia's state fund 1MDB for not cooperating with probe

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Government audit criticises Malaysia's state fund 1MDB for not cooperating with probe

PUBLISHED : Friday, 10 July, 2015, 1:08am
UPDATED : Friday, 10 July, 2015, 1:08am

Reuters in Kuala Lumpur

Malaysian police seize equipment from the 1MDB office on Wednesday. Photo: AFP

An interim report by the Malaysian government into debt-laden state investment fund 1Malaysia Development Berhad (1MDB) found nothing suspicious after vetting its accounts, a parliamentary committee said on Thursday.

The bi-partisan Public Accounts Committee (PAC) said the report by the auditor-general revealed nothing out of the ordinary but criticised 1MDB for failing to fully cooperate.

"There is nothing suspicious in the interim report," said Nur Jazlan Mohamed, head of the PAC, a group tasked to examine government accounts. "1MDB is not fully cooperating with the auditor-general," Jazlan said.

1MDB, with debts of more than US$11 billion, is being probed by authorities for financial mismanagement and graft. The state-owned firm's advisory board is chaired by Prime Minister Najib Razak.

The state fund said it had submitted all documents in its possession to the national auditor, and that it would seek clarity on PAC's comments that some documents were not submitted.

Last week the Wall Street Journal (WSJ) reported that investigators looking into 1MDB had traced close to US$700 million of deposits into personal bank accounts belonging to Najib, according to documents from the probe.

Najib has denied taking some US$700 million for his personal gain while 1MDB said the allegations were "unsubstantiated".

On Wednesday, police raided 1MDB's office to collect materials for its ongoing investigations.

A special task force set up to investigate the firm and its dealings said authorities had confiscated bank statements, documents related to business and investment dealings and minutes of meetings with 1MDB's board of directors.

It also clarified that its earlier directive did not involve freezing bank accounts belonging to Najib at Ambank Islamic because "the bank accounts had already been closed" in 2013 and early 2015 respectively.

Meanwhile Najib is weighing his legal options against the Journal. National police chief Khalid Abu Bakar has said investigators will also question the newspaper about the confidential banking documents. He said the leak of the documents was "tantamount to economic sabotage."