PAC: 1MDB directors repeatedly given inaccurate info

PETALING JAYA: The 1Malaysia Development Bhd board of directors was repeatedly given inaccurate information by the management of the government investment arm, said the Public Accounts Committee.

Among the instances highlighted by the PAC in its report on 1MDB was that the board had been told by the management that a joint-venture agreement signed on Sept 28, 2009, and a press statement of Sept 30, 2009 announcing the signing of the agreement referred to PetroSaudi Holdings (Cayman) Ltd as "PSI", while the written resolution of the sole director of the company which was signed by Tarek Obaid referred to the same company as "PSH".

"Four different companies were registered using the name 'Petrosaudi', namely PetroSaudi International Ltd, which was set up in Saudi Arabia; PetroSaudi International and PetroSaudi Holdings (Cayman) Ltd, which were set up in the Cayman Islands; and Petrosaudi International Ltd, which was set up in the Seychelles," said PAC.

It added that the Sept 28, 2009, joint-venture agreement was signed with PetroSaudi Holdings (Cayman) Ltd, and 1MDB's board of directors was unaware that the "PSI" in the agreement referred to PetroSaudi Holdings (Cayman) Ltd.

"This shows that the acronym 'PSI' was used in the joint-venture agreement as if to give the impression that PetroSaudi Holdings (Cayman) Ltd was the same entity as PetroSaudi International Ltd," said PAC.

It added that 1MDB executive director for business development Casey Tang had said that the joint-venture project between 1MDB and PetroSaudi was a government-to-government matter at a board meeting on Sept 18, 2009.

“A check of the PetroSaudi International Ltd website found that the company was only set up in 2005 and is a privately owned company with no links to the government of Saudi Arabia,” said PAC.

Additionally, PAC said that in a meeting on June 21 2012, the 1MDB board was told of the receipt from the first US$1.75bil note that was used for the Tanjong acquisition, to pay interest and an OCBC consent fee as a condition for funding a Tranche 2 syndicated bridging loan and that US$300mil remained from that amount.

However, PAC added that US$194.80mil remained from the first note.

"The 1MDB board of directors was not told of the real use of the first US$1.75bil note, which was used to pay the arranger fee, a commission to Goldman Sachs, a security deposit and the Tanjong acquisition.

"Some US$785.67mil was paid for the Tanjong acquisition compared to the US$900mil that was announced and US$ 576.94mil was paid as a security deposit to Aabar Ltd," the PAC pointed out.