1MDB: Mission accomplished with PAC report?

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It is not difficult to fathom who actually pulled the strings at 1MDB, says WH Cheng.

The many twists and turns in the report have left many readers and observers gravely confused.

The multi-billion ringgit scandal of 1Malaysia Development Berhad (1MDB) is far from over. The prime minister was hoping that the people would slowly forget about the whole episode and “move forward”. Just what kind of “move forward” is he expecting from us?

The 1MDB report released by the Public Accounts Committee (PAC) consists of many kinds of twists and turns which have left many readers and observers gravely confused and wondering if the sole purpose of this report was to absolve the prime minister of any blame or wrongdoing in the scandal.

Well, from the eyes of a lay person, it is clear the report is implying that Prime Minister Najib Razak was in no way responsible for the scandal, even if he had signed many of those documents, blindly or whatsoever. The prime minister has nothing to do with decision-making in 1MDB. The prime minister is merely the chairman of the advisory board, and he has no direct discretion over its financial and operational matters.

The PAC report was tabled in Parliament and made public but a related report by the auditor general remains classified under the Official Secrets Act.

The grave disappointment over the PAC report is that it ignored many parts of its own inquiry into the 1MDB controversy and failed to include details that had either directly or indirectly mentioned the involvement of the prime minister. The question as to whether the PAC has deliberately omitted certain parts or modified the report is left unanswered.

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The first thing the PAC report has concluded is that former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi is solely responsible for the entire mess in 1MDB, followed by the failure of the board of directors to scrutinise the management activities and its financial flows.

What the PAC failed to report

In its report, the PAC mentioned that the 1MDB management had on several occasions failed to adhere to the instructions given by the board of directors and had even commenced business transactions prior to specific approval from the board itself.

The PAC has reportedly failed to reveal that the 1MDB management had bypassed the board by reporting directly to the prime minister to seek his approval and instructions on several business transactions.

Former PAC chairman Nur Jazlan Mohammed reportedly mentioned that 1MDB has its own source of authority, not from the finance ministry but directly from the prime minister, who is also the first finance minister, in this case bypassing the government’s due process framework.

So, why did the PAC and its current chairman not go deeper into this issue given claims that it was the prime minister who was pulling the strings in many of 1MDB’s most important business decisions?

Was the PAC’s sole mission to save the prime minister from any possible exposure, disgrace or later impeachment? Is the ex-CEO fully responsible?

The PAC report has insisted that Shahrol be held fully responsible over the multi-billion ringgit mess and that he should be further investigated by the relevant authorities.

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The PAC has also urged the authorities to act against Shahrol immediately over the mismanagement and losses of 1MDB.

The question here is, why the seeming rush and insistence on picking on Shahrol? Is he being made the scapegoat?

If it is true that Shahrol is solely responsible for the fiasco, why was no action taken against him in the initial stage? Is the PAC aware that although Shahrol was no longer the CEO, he retained his directorship in 1MDB and was even transferred to the prime minister’s department to become a director of the Pemandu agency, instead of being suspended or sacked from the establishment?

And yet, after the report was released, he was still directing and issuing policy instructions in the government as if nothing had happened at all.

Defied, misled, misinformed

The PAC also said Shahrol had effectively defied, misled and withheld critical information from the 1MDB board of directors in matters concerning various business proposals and decisions.

In this case too, the PAC also failed to check the source of authority that Shahrol had obtained and had depended on.

While Shahrol may be brave enough to defy or mislead the board of directors, it is unthinkable that he would dare to act without the prime minister’s approval given the fact that such an approval channel does exist informally as mentioned earlier. Otherwise, he would have been fired from his position and disgraced a long time ago.

Furthermore, in the memorandum and articles of association (M&A) of 1MDB, Section 117 clearly states that all businesses of 1MDB must be approved by the chairman of the advisory board, who is Najib.

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This situation allows the management of 1MDB to bypass the board of directors and the finance ministry, and it is possible that the management team led by Shahrol was instructed to bypass the other approving channels by going straight to the prime minister’s office.

That is why the board of directors and the advisory board have never met because the prime minister himself could make most of the decisions.

Come on, it is not difficult to fathom who actually pulled the strings at 1MDB. So, please stop hiding under the sand, pretending that the people would forget about this sooner or later.

WH Cheng is director of Inter-Research And Studies (IRAS)

Source: Berita Daily

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Jean Mesnier
Jean Mesnier
21 May 2016 9.50pm

Thank-you for your brave article.