PM Najib must sack 1MDB bosses, Zeti must quit

Khairuddin Abu Hassan praises the Cabinet for rejecting 1MDB's cash injection request and attacks the Bank Negara Governor for relying on hope.

PETALING JAYA: A prominent critic of 1MDB has urged the Prime Minister to sack the entire governing board of the company as well as its CEO, saying they had failed in their moral and legal duties as evidenced in their recent request to the government for a RM3 billion cash injection.

The call was made by sacked Umno divisional leader Khairuddin Abu Hassan, who also said Bank Negara Governor Zeti Akhtar Abdul Aziz should resign for apparently ignoring the threat posed by 1MDB to the national economy.

In a statement given to FMT, Khairuddin congratulated Prime Minister Najib Abdul Razak and the Cabinet for rejecting the 1MDB request which he said was to “cover up the accumulating errors and misdeeds” of the company’s chairman and board of directors.

“Given this very sensible and pragmatic decision,” he said, “I should like to remind the Prime Minister of my prayer in December that the entire 1MDB board be sacked for failing in their duties, both legal and moral.

“In addition, the Prime Minister should also dismiss the newly appointed CEO, Mr Arul Kanda Kandasamy, who is clearly out of his depth and who, after much fanfare, can only think of turning to the rakyat for even more money to squander.

“Should the Prime Minister feel my prayer is out of order, then I would ask him to consider if the 1MDB board and senior management, entrusted as they are with Malaysia’s future development and her oil wealth, are anywhere near the calibre of men like Raja Tun Mohar Raja Badiozaman, Datuk Rastam Hadi and Tun Abdullah Salleh, whom his father, Tun Abdul Razak, appointed as economic managers and advisors.”

His call for Zeti’s resignation came in a separate statement which referred to reports of the central bank governor “expressing her hope that ratings agencies will give Malaysia a fair assessment” and not downgrade Malaysia’s sovereign ratings.

“It is as if the governor is unwilling to confront the real, obvious issue of the 1MDB loan default,” he said.

“That our beloved governor must now plead for fairness from international rating agencies is really a reflection of where the country and the economy is at – near the gutter, as it was during the Asian Crisis of 1997-98.”

He referred to news reports worldwide that “have attributed the fall of the ringgit to the ever-growing risk of 1MDB defaulting on its loans”.

Khairuddin also referred to the 1MDB’s audited accounts for the period ending on March 31, 2013. He highlighted the US$1.58 billion (RM4.9 billion) meant to be used for the development of the Tun Razak Exchange (TRX) but which 1MDB decided to place with overseas investment institutions.

“The US1.58 billion was part of the US$3 billion debt securities that had been issued by 1MDB’s subsidiary, 1MDB Global Investements Ltd (1MGIL), and the debt papers were supported by a letter of comfort from its shareholder, which is the Government of Malaysia,” he said.

“The amount was to be used as seed capital for the development of TRX by Abu Dhabi Malaysia Investment Co Ltd (ADMIC).”

ADMIC is a 50:50 joint venture betweeen 1MGIL and Aabar Investments PJS.

Khairuddin noted that the Aabar group in 2011 thwarted efforts by Maybank and CIMB to take over RHB Capital Bhd.