‘MOF sidelined, only knew about 1MDB operations through newspapers’

PAC The Finance Ministry (MOF) was completely in the dark about its subsidiary 1MDB’s operations, Treasury secretary-general Irwan Serigar Abdullah revealed to the Public Accounts Committee (PAC).

According to the Hansard of PAC’s 1MDB hearings on May 19, 2015, Irwan and Finance Ministry Inc (MKD) chief Mohamad Isa Hussain said 1MDB had not referred to the ministry or MKD about their operations or corporate affairs.

“We don’t know about (1MDB’s) operations at all. We don’t know. We read (about) it all in the newspapers,” Irwan told the committee.

The issue was compounded by the fact that ministry officers were not in 1MDB.

Mohamad Isa said 1MDB’s Memorandum and Articles of Association (M&A) bars government officers from being on its board of directors.

No explanation was given when the PAC asked why the M&A had not been changed even though MKD had the power to do so.

Instead, Mohamad Isa brought attention to Article 117 of the M&A which states that the prime minister’s approval is required for any changes to the M&A.

Article 117 also states that the prime minister’s approval is needed for the appointment and removal of directors.

When pressured over the ministry’s seeming lack of control over 1MDB, Irwan said they were “sidelined”.

“Operation-wise, MOF is not involved. We were sidelined.”

Irwan said his predecessor Wan Abdul Aziz Wan Abdullah had written to 1MDB urging them to conduct due diligence, but this was “turned down”.

Similarly, the Treasury secretary-general said when his deputy wrote to 1MDB seeking information, they did not get a reply.

Irwan said 1MDB had only started keeping the Finance Ministry in the loop after Prime Minister Najib Abdul Razak formed a committee to discuss the sovereign wealth fund’s rationalisation plan.

In the PAC report, published on Thursday, the committee found that 1MDB former chief executive officer Shahrol Azral Ibrahim Halmi and others in the management should be held responsible for the weaknesses in the firm’s administration.

The PAC also recommended that Article 117 of the M&A be abolished. and that 1MDB should report to the Finance Ministry as other MKD companies, not the prime minister.

The committee did not recommend any action against Najib, who set up 1MDB. -Mkini