MACC & EC

NGOs want MACC to probe WSJ’s claims about 1MDB

Mikha Chan

 | June 29, 2015

NGOs file their complaints to the anti-corruption commission following the Election Commission’s refusal to probe the matter.

PUTRAJAYA: Following the Election Commission’s (EC) refusal to investigate allegations made in a Wall Street Journal (WSJ) report about possible corrupt practices in political funding, three NGOs met today with MACC in Putrajaya to submit a number of complaints related to 1MDB, Genting Bhd and charity fund Yayasan Rakyat 1Malaysia (YR1M).

The NGOs present at the meeting with the Malaysian Anti-Corruption Commission were the Coalition for Free and Fair Elections (Bersih 2.0), Centre to Combat Corruption and Cronyism (C4), and Transparency International Malaysia (TI-M).
The meeting followed the WSJ report published earlier this month that claimed 1Malaysia Development Berhad had in October 2012 acquired a Genting unit that owned a 75% stake in a coal-fired power plant near Kuala Lumpur for about RM2.3 billion, with Genting reporting an extraordinary RM1.9 billion gain on the said transaction.
“In its financial accounts for 2013, 1MDB took a write-down charge of RM1.2 billion. This write-down charge signals that 1MDB recognised it had overpaid for the power assets,” said the NGOs in a joint statement released after the meeting.
“We ask the MACC to investigate whether any malpractices were committed by 1MDB when it purchased the power assets at a price inflated by RM1.2 billion.”
They said that if MACC’s preliminary findings indicated a basis for further investigations, MACC must conduct a forensic accounting investigation to check whether proper valuation was done prior to the acquisition and whether the price paid for the acquisition was excessive.
The other complaints filed requested that MACC investigate the report’s other claim that Genting unit, Genting Plantations Bhd (GPB), had donated about USD10 million to YR1M, which stock analysts had said reduced the company’s net profit for the first quarter of 2013.
“We therefore ask the MACC to investigate whether this is an extraordinarily large donation (compared to previous donations by GPB, if any), what GPB expected to gain for its shareholders through this extraordinarily large donation to YR1M, and whether any malpractices were involved,” said the NGOs.
“We further ask MACC to investigate whether the donation was paid as ‘gratification’, defined under the MACC Act 2008 as a favour in return for 1MDB’s paying over and above the market price.”
They also charged that YR1M wrongfully used funds intended for underprivileged Malaysians, and that though the charity was set up to help this group through education and sports, its spending appeared designed to help Prime Minister Najib Razak retain power in the 13th general elections instead.
“We ask the MACC and the police to investigate YR1M for misappropriation of funds since the WSJ has alleged that money was donated to parties not in the scope of the YR1M’s objective,” said the NGOs.
TI-M pointed out that it had been lobbying for the reform of political financing in Malaysia since 2008, and that they had submitted a memo in 2011 to the Prime Minister’s Office, offering 22 recommendations for reform in order to improve transparency, integrity and accountability in political financing.
“Under such reforms, the misappropriation of funds could be tracked and even deterred. Given that 1MDB is already steeped in controversy and allegations continue to surface, a thorough and transparent probe is much needed,” said the NGOs.