Malaysia's finance ministry said on Wednesday
it would dissolve the board of advisers at 1Malaysia Development Berhad
(1MDB) and take over its remaining assets, in an apparent move to scale
down a state fund whose scandals have rocked the government.
Prime Minister Najib Razak is facing calls to
step down over 1MDB, which was his pet project and whose advisory board
he chaired. The fund is now being investigated for money-laundering in
at least six countries including the United States, Switzerland and
Singapore.
Last month, parliament's Public Accounts
Committee (PAC) called for 1MDB's advisory board to be abolished, after
an investigation into the fund, whose debt in January had totaled about
50 billion ringgit ($12.5 billion).
The PAC criticized the board for being irresponsible but stopped short of implicating Najib.
However, it said Najib, who is also finance minister, was authorized to sign off on the fund's major transactions.
The prime minister has denied any wrongdoing.
The ministry said in a statement ownership in 1MDB's subsidiaries and four land assets would be transferred to it.
It did not say what happens to debt linked to the assets.
The ministry also accepted the resignation of
1MDB's board members, who collectively stepped down last month. New
members would be appointed to reflect the limited business profile of
1MDB, it said.
Reuters reported last year that the fund would
be left as a skeletal structure and possibly dissolved under a debt
repayment plan.
The ministry said it would also remove Article
117 in the fund's company articles, which requires the prime minister's
written approval for all its financial commitments, including
investments and matters such as appointment of the board of directors.
It would also change all references of "prime minister" to "minister of finance".
DEFAULT LOOMING
Critics say Najib was a beneficiary of 1MDB's
funds, after about $681 million was deposited in his bank account before
a 2013 election.
Najib and 1MDB have dismissed that. The
state-appointed attorney-general said the funds were a gift from Saudi
Arabia's royal family and most of it was returned.
But global inquiries into 1MDB's money transfers are picking up pace and weighing on Malaysia's economy and its currency.
Swiss authorities have said about $4 billion was misappropriated.
Last week, 1MDB missed a deadline to pay a
$50.3 million coupon on a $1.75 billion bond following a stand-off with
Abu Dhabi sovereign fund International Petroleum Investment Co (IPIC),
which says 1MDB never met payment obligations.
Another interest payment is due on May 11.
"The change of board does not detract from
broader global investigations into the finances of 1MDB which is still a
residual overhang notwithstanding 1MDB’s improved balance sheets after
the sale of its energy assets," said Weiwen Ng, an ANZ Research
economist.
Post a Comment