1MDB Probe Revived by Group That Found $4.2 Billion of Odd Deals

(Bloomberg) -- A Malaysian parliamentary committee will reopen its probe into state fund 1MDB amid accusations important information was omitted from an earlier investigation that took place when the previous government was in power.

Parliament approved Finance Minister Lim Guan Eng’s motion for the investigation to be restarted, according to proceedings late Thursday. Lim said it would allow former premier Najib Razak to clear his name and shed more light on wrongdoing that allegedly occurred at the investment company, the Star newspaper reported.

Prime Minister Mahathir Mohamad is seeking to fulfill an election campaign pledge to map out the scope of missteps at 1Malaysia Development Bhd. after he spent years accusing Najib’s government of covering up alleged embezzlement and misuse of funds at the company. 1MDB had insisted all funds were accounted for. The anti-graft agency and police have also restarted investigations, while the finance ministry has commissioned an audit of 1MDB’s accounts by PricewaterhouseCoopers LLP.

The bipartisan Public Accounts Committee concluded its probe in 2016 and issued a 106-page report detailing at least $4.2 billion of unauthorized and unverified transactions. It called for an investigation into former CEO Shahrol Halmi and other unidentified managers, while absolving their political bosses of responsibility for a scandal that had roiled markets and sparked worldwide graft probes.

Transcripts

The PAC later released transcripts from a parliamentary hearing that underlined Najib’s role in deciding on the questionable deals that bypassed the board of directors and finance ministry. Najib once chaired 1MDB’s advisory board.

The transcripts showed 1MDB and government officials making multiple references to Article 117 of the fund’s constitution, which states all matters need authorization from the then-premier. Meanwhile finance ministry officials, the sole shareholder of 1MDB, told the PAC they weren’t consulted on the fund’s investment decisions or finances.

Najib has pleaded not guilty to several charges linked to a former unit of the state fund and denied having knowledge of wrongdoing at 1MDB. He didn’t object to the reopening of a probe by the PAC, but said in Parliament this week that the aim shouldn’t be to “look for faults.”

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