G25: Bank Negara can take civil action against 1MDB

MALAYSIA - The central bank on May 7 became the first in Southeast Asia to cut its key interest rate this year, by 25 basis points to 3.0%, moving to support its economy at a time of concern about global growth.

PETALING JAYA: The G25 Group of eminent Malays wants Bank Negara to take civil action against 1Malaysia Development Bhd without the involvement of the Attorney-General's Chambers.

It said the central bank "would be well within its power" to take action against 1MDB independently of the AGC under Section 239 of the Financial Services Act.

“Since the central bank’s action to date is within its powers to take up the civil suit, Bank Negara can, therefore, proceed to act independently without consultation or any manner of involvement of the Attorney-General.”

G25 said although decision on a criminal action could only be made by the AGC, the action it is suggesting is that Bank Negara proceed with civil action for non-compliance with the bank’s direction and "ask the court for any of the orders under the act."

Should 1MDB fail to comply with the court order, Bank Negara would be able to institute contempt proceedings against 1MDB, G25 said.

"Legal experts have verified that this need for civil action is appropriate and has only arisen because the Attorney-General has decided there are no grounds to prosecute and denied Bank Negara’s request that the case be reviewed and re-examined,” G25 added.

Attorney-General Tan Sri Mohamed Apandi Ali had said that the AGC would not be taking further action against 1MDB, despite BNM’s appeal for review, as there was no additional evidence.

Following this, Bank Negara revoked three permissions granted to 1MDB under the Exchange Control Act and had ordered the state fund to repatriate US$1.83bil (RM7.87bil).

G25 said just because the money to be repatriated by 1MDB had been spent, it did not mean that the plans for repatriation could not be submitted to BNM.

The group added that the central bank could take further action on 1MDB under the Financial Services Act.

“In the interest of the country and exercising its powers fairly, Bank Negara Malaysia must indeed follow up with the necessary actions under the law,” G25 said.