Timeline: The twists and turns in the tale of 1MDB

Saheli Roy Choudhury | Special to CNBC
Monday, 21 Sep 2015 | 11:03 PM ET

For Malaysia’s Prime Minister Najib Razak, the hits keep coming.

Just as the capital Kuala Lumpur settles down following a fraught rally last week, at which riot police turned water cannons on supporters of the PM, top U.S. media outlets, the Wall Street Journal (WSJ) and the New York Times (NYT), have reported yet more scandalous allegations about the country’s sovereign wealth fund.

The 1Malaysia Development Berhad (1MDB) has been in the limelight for months, amid allegations of false auditing, huge debt and, more recently, financial fraud, with alleged links to Najib himself. (The PM has repeatedly denied any wrongdoing. His office has yet to respond to a request for comment on the latest developments.)

For outsiders, the twists and turns surrounding 1MDB can be dizzying. So, as the action heats up, here is a handy timeline of the events you should know about:

2008 – 1MDB is launched in the Malaysian state of Terengganu, with the aim of promoting long-term, sustainable economic development.

2009 – Najib expands the fund’s operation nationally, with himself as chairman of the fund’s advisory board.

2010 – Tony Pua, an MP with Malaysia’s biggest opposition party, questions Najib on the fund’s 425 million ringgit ($99.7 million*) profit, the Malaysian Insider reports. Pua asked the Najib to explain whether the paper profits were a result of transferring other government assets to 1MDB.

Video : http://video.cnbc.com/gallery/?video=3000419607

February 28, 2015 – UK-based investigative outlet, the Sarawak Report, edited by English journalist Clare Rewcastle Brown, publishes a detailed report accusing Malaysian billionaire Low Taek Jho of siphoning as much as $700 million from 1MDB. The report accuses Low of using PetroSaudi International, an oil company from the Middle East that signed a joint venture deal with 1MDB, as a front to siphon the money.

March 7 – The AFP reports on a letter it received from London-based law firm Schillings, which represented Low, in which he denies the allegations put forward by the Sarawak Report.

March 25 – A special task force is announced to look into 1MDB and its 42 billion ringgit ($11.5 billion) debt. Reports say the task force comprises the Inspector-General of Police (IGP), the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers, and the police force.
May 19 – The Malaysian Parliament’s Public Accounts Committee (PAC) begins an investigation into 1MDB, according to reports.

June 3 – The Malaysian central bank launches a formal inquiry into 1MDB, requesting the fund hand over information so the central bank can determine if it has violated any of the bank’s rules. On the same day, Reuters reports that the fund has released a detailed breakdown of its 42 billion ringgit debt, in order to counter allegations that some of the money is missing.

July 2 – The WSJ publishes a lengthy report on a government probe into the allegations surrounding 1MDB, alleging the probe has traced nearly $700 million flowing from the fund to Najib’s personal bank accounts. The PM’s office denies the allegations.

July 8 – A Malaysian task force, led by the then-Attorney General Abdul Gani Patail, the country’s central bank and the Malaysian Anti-Corruption Commission, which was already investigating the 1MDB developments, freezes bank accounts related to the scandal. Malaysian police raid the offices of 1MDB.

July 19 – The Malaysian Communications and Multimedia Commission, which regulates Malaysia’s internet, blocks access to the Sarawak Report from within the country.

July 22 – Singapore police suspend two local bank accounts connected to 1MDB. The Monetary Authority of Singapore says later that it is looking at the bank accounts to ensure they followed proper procedure for financial transactions.

July 27 – Malaysia’s Home Ministry suspends the publishing permits of The Edge Weekly and The Edge Financial Daily – both of which belong to the Edge Media Group – for three months as punishment for their reporting on 1MDB. The Edge Financial Daily previously reported about the ongoing 1MDB scandal, including a detailed report claiming Low Taek Jho and PetroSaudi cheated Malaysia of $1.8 billion in cash.

July 28 – Najib carries out a cabinet reshuffle, dropping several ministers including Deputy PM Muhyiddin Yassin and Rural and Regional Development Minister Shafie Apdal. Yassin and Apdal had been critical of Najib’s role in 1MDB. Malaysian state news agency, Bermana, reports that Attorney General Abdul Gani Patail was also replaced citing health reasons ahead of his retirement in October.

August 3 – The Malaysian Anti-Corruption Commission finds that 2.6 billion ringgit ($700 million) in Najib’s personal account came from donors, not 1MDB, Reuters reports.

August 4 – Malaysian police issue arrest warrant for Clare Rewcastle Brown, editor of the Sarawak Report, on grounds of disseminating false reports on Najib.

August 14 – The ringgit, which had been on a downward trend, plunges to a 17-year low, losing as much as 2.6 percent to 4.1180 per dollar, in part due to concerns about the Federal Reserve’s expected rate hike, and also because outside investors are concerned about the turmoil surrounding Najib.

August 21 – Local media report that a new Malaysian task force is being formed to continue the 1MDB investigations, notably leaving out the Malaysian Anti-Corruption Commission. Also, Switzerland’s Office of the Attorney General opens criminal proceedings against two financial entities of 1MDB and against an unknown person, according to Reuters. Swiss financial regulator, FINMA, announces that is looking into specific Swiss banks, including whether they did business with 1MDB.

August 25 – The Malaysian Attorney General’s office says the new task force is not involved in investigating 1MDB and related companies, but will investigate crimes such as tax evasion and illegal fund flows. Reuters reports that the AG’s office says the new task force will, in fact, include staff from the Malaysian Anti-Corruption Commission.

August 29 – An estimated 25,000 people attend a weekend-long anti-government protest calling for the resignation of Najib. Former Malaysian leader Mahathir Mohamad, once a Najib ally, attends the rally.

September 7 – Local media reports the resignation of 1MDB advisory board member Abdul Samad Alias. Samad’s resignation came after his repeated requests for a briefing on 1MDB’s profits and losses went unanswered by the fund, according to reports.

September 9 – The WSJ reports that officials from an Abu Dhabi-based state investment fund, International Petroleum Investment Co. (IPIC), claim IPIC never received nearly $1.4 billion in payments owed by 1MDB for the purchase of power plants in 2012. 1MDB denies there are payments outstanding from its purchase of power plants in 2012. Draft reports, which the WSJ reviewed showed the $1.4 billion was paid by 1MDB to a IPIC subsidiary, Aabar Investments PJS.

September 10 – Hong Kong police begin a probe into deposits of more than $250 million, allegedly made to accounts related to 1MDB at a Credit Suisse branch in the city, the Financial Times reports. The investigation was prompted by a report to the authorities by vocal critic of 1MDB, Khairuddin Abu Hassan of UMNO. UMNO is also PM Najib’s party.

September 14 – The Sunday Times reports the UK Serious Fraud Office is looking into evidence surrounding allegations of possible money laundering and financial fraud, brought against 1MDB by the UK-based Sarawak Report.

  1. #1 by tmc on Monday, 28 September 2015 - 9:18 am

    LKS, do you need an extra pair of eyes, how come you wrote
    August 29 – An estimated 25,000 people attend a weekend-long anti-government protest …..

    Wasn’t the count an estimated 250,000, do correct your statement asap. By a long shot, the attendance was much more than the red t-shirts rally.

You must be logged in to post a comment.