I trust PAC over Auditor-General in 1MDB probe, says Dr M

Former pirme minister Tun Dr Mahathir Mohamad views the scope of the Auditor-General's investigation into the 1MDB scandal will not be enough to get the right answers. – The Malaysian Insider pic by Seth Akmal, June 1, 2015.Former prime minister Tun Dr Mahathir Mohamad is placing his faith in the Public Accounts Committee (PAC) rather than the auditor-general to get to the bottom of the 1Malaysia Development Bhd (1MDB) scandal.

He said this was because the PAC could probe into the troubled state investment arm’s background and ask the pertinent questions regarding all the funds that could not be accounted for.

“I would place my faith in the PAC more than the auditor-general. The auditor-general inspects books. They don’t do forensic auditing, they don’t try to poke and find out where was this money spent, how was this money spent, where did you lose this money.

“They only check on the books so they will not discover much because the people who are keeping the books may be very clever people,” Dr Mahathir said during a talk tonight organised by the Foreign Correspondents Club of Malaysia at the Hotel Istana, in Kuala Lumpur.

He said that if the PAC exercised its full authority, it could even summon Prime Minister Datuk Seri Najib Razak to explain why 1MDB’s money was missing.

He said the PAC could quiz the prime minister, who is also the chairman of 1MDB’s advisory board, over where 1MDB’s money was located, why it had borrowed money at such high interest rates, and why it paid exorbitant commission fees.

“Just imagine, borrowing money, you get only 90% of the money you borrowed at a high interest rate. That will be very stupid,” said Dr Mahathir.

He added that while he had been patient with Najib in the past few years, 1MDB was the last straw for him.

“There were many things he did that wasn’t good or productive for the country, but I held myself back. But then came 1MDB. I studied this thing very carefully, I asked him what is 1MDB, his answer wasn’t satisfactory.”

Dr Mahathir said Najib explained to him 1MDB’s business model was to buy companies at a low price, then sell them at a higher value.

Dr Mahathir said he could not accept this, as the “government is in the business of collecting taxes”, not “buying and selling companies”.

He said he was also unable to accept the prime minister’s failure to explain where 1MDB’s funds were, given that the company was set up using borrowed money backed by the government.

“If you use government money, you must be able to account for every single sen,” said Dr Mahathir.

Criticism has been mounting over the Finance Ministry's wholly-owned investment vehicle, established in 2009, which has chalked up debts of up to RM42 billion, backed by Putrajaya.

The Auditor-General is currently looking through 1MDB's books, with a preliminary report expected to be submitted to the Parliament in June, while the Public Accounts Committee started its own investigation into the company on May 19.

- TMI