16 March 2017
1MDB: The Year of Reckoning
As the international investigation into the billion-dollar graft scandal at 1MBD deepens, the Malaysian fund itself is remarkably calm. The country’s political opposition faces an uphill battle to change that.
1MDB, which is ultimately under the purview of Prime Minister Najib Razak, has been an island of calm amid a sprawling investigation which has shuttered two banks in Singapore, jailed and barred bankers, and revealed an asset haul including a now-grounded private jet and financing for a Hollywood blockbuster co-produced by the PM’s stepson.
The fund’s board hasn’t met in nearly one year, nor validated any profit-and-loss accounts for a whopping five years, Tony Pua, a spokesman for Malaysia’s opposition, said in Kuala Lumpur on Wednesday, according to «Sarawak Report».
Razak and Malaysia have insisted that 1MDB didn’t suffer any damages, a view that is echoed among legally-minded bankers in Singapore. This view is difficult to reconcile with the depth, scale and detail of the U.S. probe, the largest kleptocracy investigation in the country’s history.
North Korean Crisis
More recently, Najib has been absorbed after the apparent killing of would-be North Korean leader Kim Jong Nam at Kuala Lumpur airport last month. Kim’s death has sparked a diplomatic crisis between North Korea and Malaysia, one of the few countries to maintain ties with the largely isolated state.
Najib is working to release 11 Malaysians now stuck in North Korea, seemingly in retaliation for a Malaysian investigation into Kim’s death.
Late last year, 1MBD got a helping hand with its debts to Abu Dhabi – from China – in what appears to be an assets against financing swap.
The only sign at the fund that something might be amiss is with its outside auditors: three of the Big Four seem to have backed away from the work they did for 1MDB, most recently Deloitte last summer. The fund has since appointed London-based Parker Randall as its new auditor.
«Malaysian Official 1»
Najib isn’t named in U.S. documents detailing the case, but his step-son Riza Aziz and close associate Jho Low are.
However, descriptions and identifying details of an unnamed «Malaysia Official 1,» or MO1, match Najib’s position at 1MDB. He has kept a lid on the scandal domestically, thanks in part by squelching investigation of it at home as well as due to an ineffectual Malaysian opposition.
Najib is also expected to call snap elections sometime this year, a litmus test which will show whether his popularity has been affected by his involvement in the scandal.