‘Shahrol the man to blame’

PETALING JAYA: Former 1Malaysia Development Bhd (1MDB) chief executive officer Datuk Shahrol Azral Ibrahim Halmi is the man to blame for 1MDB’s “weaknesses and constraints”.

In a 106-page report tabled in Parliament yesterday, the Public Accounts Committee (PAC) also blamed the state investment arm’s board of directors for failing in its responsibilities.

“After looking through the final reports by the Auditor-General’s Department and the explanations by 1MDB, PAC is of the opinion that there were certain weaknesses and constraints by the 1MDB management and board of directors.

“Specifically, PAC is of the opinion that its former chief executive officer Datuk Shahrol Azral Ibrahim Halmi must take responsibility for the weaknesses and constraints.

“Therefore, the enforcement agencies are asked to investigate him and other relevant managements,” said PAC in the report.

The others named in the report include Terengganu Investment Authority (TIA) adviser Low Taek Jho, his associate Casey Tang and PetroSaudi International Ltd CEO Tarek Essam Ahmad Obaid.

Shahrol Azral, in a statement issued later in the day, said there was no wrongdoing or illegal activity in the company under his watch.

Shahrol Azral was the first CEO of 1MDB when the company was still known as Terengganu Investment Authority, and most of 1MDB’s major deals and borrowings took place during his tenure.

Under his watch, 1MDB issued its very first debt papers for RM5bil, directly disobeying the board of directors who instructed the exercise to be put on hold.

He resigned his position as CEO on March 15, 2013, when 1MDB’s debt count stood at RM36bil, but remained as a board member.

The PAC probe into 1MDB began in May 2015 but was halted in July following a Cabinet reshuffle that saw first-time MP Datuk Hasan Arifin replacing former committee chairman Datuk Nur Jazlan Moha­med, who was appointed deputy home minister.

Apart from Shahrol Azral, among the others called to testify before the PAC were former 1MDB chairman Tan Sri Lodin Wok Kamaruddin and current president and CEO Arul Kanda Kandasamy.

However, the PAC report was not tabled with the Auditor-General’s report, which was received by the PAC a month ago. Its contents have been classified under the Official Secrets Act.

In its report, the PAC also hit out at 1MDB’s management for repeatedly defying the board of directors.

“1MDB should have practised good administrative principles, as per the guidelines by Putrajaya Committee on High Performance GLCs.

“An over-dependence on debt in capital structure is not permissible at all, more so when the company’s cash flow is insufficient,” it said.

The PAC also took note of a few investments and huge loans secured, that were done without proper valuation.

“The board of directors were found to have failed to carry out their responsibilities to protect the interests of the company and shareholders, and they also did not take the proper action or were not proactive in reviewing the activities of management and the future cash flow of the company.”

PAC also recommended the abolition of 1MDB’s board of advisers, along with Article 117 in its memorandum and company articles.

“All references to the Prime Minister should be changed to Finance Minister, in line with the allocations of other companies owned by Minister of Finance (Incorporated). Also, 1MDB subsidiary companies and assets, such as TRX, Bandar Malaysia, and land in Air Itam and Pulau Indah, should be handed over to MoF Inc so they will be better monitored and managed,” said the report.