PAC confirms suspicion Bank Negara funds used for 1MDB bailout

 

The Public Accounts Committee (PAC) has confirmed suspicions that a plot of land Bank Negara Malaysia purchased from the federal government for RM2.07 billion in 2017 was intended to pay off 1MDB's debts.

The PAC, which tabled its report on the matter, said Bank Negara paid RM2.07 billion for the land, which the Valuation and Property Services Department had valued at RM1.422 billion.

"Proceeds from the sale were used for payment under the 1MDB rationalisation plan on Dec 31, 2017," PAC chairperson Wong Kah Woh said in a statement.

The Bank Negara governor at the time was Muhammad Ibrahim.

Muhammad had denied wrongdoing amid widespread speculation that the abrupt land purchase was intended to bail out 1MDB.

“This is totally untrue. Bank Negara will never be party to any such activities that would betray the public trust in us. We abhor any semblance of corruption and abuse of power,” he had said in response to the speculation at the time.

PAC chairperson Wong Kah Woh

The PAC in its findings said Bank Negara had never planned to purchase the land before the Finance Ministry made the offer.

The panel added that the purchase of the land was also not part of Bank Negara's strategic plan from 2015 to 2017 even though Bank Negara later claimed it wanted to develop an education services hub.

The land, Lot 41, is adjacent to the Sasana Kijang complex belonging to Bank Negara in Kuala Lumpur.

"Bank Negara did not conduct sufficient due diligence in the purchase of Lot 41. The Bank Negara board made a decision to buy the land within nine days after discussing with the Finance Ministry (Aug 15, 2017) and three days after the offer was made by the Finance Ministry (Aug 21, 2017).

"The transaction was completed in a short time of four months. All these raised suspicion that Bank Negara was facing pressure from the government to make the decision," the PAC said.

It added that Bank Negara paid RM2.07 billion for the land even though its usage status was still listed as "None".

The PAC, in its recommendation, stressed that Bank Negara should be able to act independently without being influenced.

It added that the central bank should expedite the change of the land status and its division to ensure optimum use.

Muhammad was replaced as the Bank Negara governor after the collapse of Najib Abdul Razak's government after the 2018 general election.

Najib is currently facing various charges related to the alleged misappropriation of 1MDB funds.

The Kuala Lumpur High Court has also sentenced him to 12 years imprisonment and an RM210 million fine for the misappropriation of SRC International Sdn Bhd funds, a former 1MDB subsidiary.

The conviction was upheld by the Court of Appeal. Najib can still appeal to the Federal Court. - Mkini