1MDB won’t shake investor confidence, says InvestKL

Government entity says multinational companies also consider factors such as policies and regulations, cost and infrastructure in their decision-making process.

PETALING JAYA: Good governance is not the only factor considered by multinational companies (MNCs) looking to invest in Malaysia, a government body says in the wake of Prime Minister Najib Razak’s admission of 1MDB’s failings.

InvestKL Corp, which comes under the Economic Transformation Programme (ETP), said other components such as policies and regulations, talent, cost, infrastructure, strategic direction and financial condition also played a role in the decision-making process.

“When they look at this long checklist of other criteria, all of these things are important.

“They are aware of the [1MDB] incident but these are the criteria for them to make a decision,” InvestKL Corp CEO Zainal Amanshah told The Edge Financial Daily.

Zainal’s comments come two weeks after Najib’s surprise acknowledgement of 1MDB’s failings in several areas, including lapses in governance.

“I am not going to brush over this issue. There were indeed failings at the company,” the prime minister said at the Invest Malaysia 2018 conference last month.

He said the government was aware of 1MDB’s failings, which was why it had launched an investigation involving multiple authorities.

“Their findings were taken on board – and the company’s board was dissolved, its management team changed, and its operations reviewed,” he added.

It has been alleged that billions of ringgit were stolen from the state investment fund, which was was created by the government to promote long-term economic development for the benefit of the Malaysian people.

In 2016, Bloomberg reported that the country’s economic fundamentals were good, but that the 1MDB issue was causing investors to think twice.

It said investors were uncertain about the political situation, which in turn affected their decisions.

However, Zainal said MNCs still considered Malaysia a conducive venue for business.

“Our government has been transparent to say that we could have done better [on governance]. But the decision-making for an MNC is not purely on that,” he said in the report. -FMT