‘FLAWS, WRONGDOINGS’ IN MANAGEMENT OF 1MDB
AG says senior officials withheld information, made decisions without board approval
THERE were flaws and wrongdoings in the management of 1Malaysia Development Bhd (1MDB), according to the auditor general’s executive summary in the audit report on the strategic investment fund.
The report, which was declassified on Tuesday, cited poor governance and internal controls, with senior 1MDB officials withholding information and making decisions without the board’s approval.
Auditor General Tan Sri Dr Madinah Mohamad verified the authenticity of the report.
Malaysia, under former prime minister Datuk Seri Najib Razak, had classified the audit report in 2016 under the Official Secrets Act when 1MDB’s financial troubles were being investigated.
The report said corporate best practices and controls in 1MDB, which was set up in 2008 to fund domestic infrastructure projects, were less than satisfactory.
It said the filing and records for 1MDB were not systematic.
It said that in many instances, the management and decisions by its chief executive officer were disorganised.
From 2009 to 2015, some important decisions on investments with high absolute values were made without the resolution of the 1MDB board, or proper discussions or deep analysis.
“A few of these investments were also risky in nature and should be made carefully, but unfortunately, were made over a very short period of time and even before approvals from the board,” the report said.
In instances that board approval was needed, the 1MDB management presented information that was not complete or accurate to the board before an important decision was made.
The misinformation continued outside the board as the management gave inaccurate or conflicting information to interested parties. The report said if the 1MDB management had obtained board approval on certain matters, action taken would have been different.