Nazir Razak tells 1MDB Directors to deal with 1MDB Financial Problems or Resign

Malaysia’s No. 1 Banker, Nazir Razak, said at the ASEAN Business Form yesterday that 1MBD Directors and management must deal with the sovereign fund’s financial problems or resign. He is right in demanding corporate accountability.

The truth be told, the Chairman Tan Sri Lodin Wok Kamaruddin and his Board colleagues have failed to perform their fiduciary duty and must  take  full responsibility for  what had happened to the fund  and deal with the pressing issues, or resign. It is within the powers of the Board to engage an independent firm of auditors to do a forensic audit. There is pressure from creditor banks which  if left ignored could trigger a cross default. The management team led by this hot-shot Arul should  too be fired as soon as possible.

The Board of Directors cannot wait for the Auditor-General to complete his report;  it is not likely that Ambrin Buang will be able to complete his task any time soon. He is taking his time. Without being cynical, I think Ambrin is looking for divine inspiration as he knows his report could implicate the Prime Minister who is Chairman of the fund’s Board of Advisors. But  the Auditor-General should know that 1MDB’s problems won’t just go away. In fact, with the passage of time, they will get worse.–Din Merican

Nazir Razak tells 1MDB Directors to deal with 1MDB Financial Problems or Resign

Malaysia’s No. 1 Banker, Nazir Razak

Board members of state investment firm 1Malaysia Development Bhd must appoint an independent auditor to verify its accounts or resign, says CIMB Group Chairperson Nazir Abdul Razak.

Nazir is the younger brother of Prime Minister Najib Abdul Razak, who is chairperson of 1MDB’s Board of Advisors.

“The immediate check for a responsible board is to appoint an independent (auditor) now[…] otherwise the board and management, in my view, should resign.It is your basic responsibility. There’s a complete mistrust in your financial situation. You have to responsibly deal with that. But instead you sit there and wait for A-G (Auditor-General). To me that’s irresponsible. If you do that then it’s better for you to step down and let someone else come in and take over,” the banker was quoted by The Star as saying over luncheon at the ASEAN Business Club forum today (May 14).

1MDB has been attacked for remaining silent despite numerous reports of mishandling of funds. On Wednesday, Singapore’s Business Times reported that a group of banks led by Deustche Bank is demanding early repayment of a RM3 billion loan after doubts rose over 1MDB’s collateral held in a Singapore bank.

1MDB said it could not comment on the matter due to confidentiality issues. The early repayment demand could trigger a cross default, with the government admitting that 1MDB has poor liquidity. This could affect the government’s credit ratings.

Najib earlier said 1MDB is keeping the funds repatriated from the Cayman Islands in Singapore for ease of transaction.The funds were repatriated after public pressure, given 1MDB’s mounting debts of RM42 billion. The government guarantees RM16 billion of the firm’s loans. The firm is fully owned by the Finance Ministry, which is also headed by Najib.

Nazir previously said that even his teen son can tell that 1MDB is problematic, and urged the firm to clear the air over its alleged mismanagement.