Transfer of 1MDB assets to MoF Inc on track

KUALA LUMPUR: The transfer of assets to MoF Inc from 1Malaysia Development Bhd (1MDB) is on track and will be completed by end-May, Second Deputy Finance Minister Datuk Johari Abdul Ghani said.

The process is in the final stages and should not be a complicated exercise as 1MDB is wholly-owned by MoF Inc, he said.

"The (board of) directors have (also) tendered their resignation," he told reporters after the launch of Malaysian Directors Academy (MINDA) 2.0 here Tuesday.

The move is part of the recommendations by the Public Accounts Committee (PAC), which in its 106-page report said the transfer of assets and subsidiaries to MoF Inc would allow for closer scrutiny of the firm.

MoF Inc has said it would appoint new board members to reflect the limited business profile of 1MDB.

"We understand that no more activities can be undertaken by 1MDB (after completion of the exercise). So we will look at all those details, and we will have a caretaker board, and it can come from MoF people," he added.

Earlier this month, the government said 1MDB would transfer ownership of Bandar Malaysia Sdn Bhd, TRX City Sdn Bhd as well as Air Itam and Pulau Indah land tracts to MoF Inc, in response to the suggestion by the PAC report on 1MDB (PAC Report).

"For the TRX, we have a joint venture with Lend Lease (Australia-listed property developer). They (the joint venture) cannot move, because they cannot get financing due to the issue with 1MDB. Likewise for Bandar Malaysia (Project).

"It's very difficult for local or international banks to finance (the project) when you have an issue with 1MDB," he said.

Johari said 1MDB has also engaged with its bond holders regarding the exercise to ensure that they are on board with the transfers.

"There are two types of bond holders (for 1MDB) - bond holders who are currently subscribing to the sukuk with 1MDB, and those who deal with IPIC.

"So the IPIC bond holders, basically they are only interested to go to IPIC as the bond is guaranteed by IPIC, principal and interest," he added.

In his keynote speech, Johari urged companies to carefully select their board directors, making sure that the persons are qualified with a knowledge of economics and finance and have relevant industry experience.

"Importantly, they must possess high integrity and accountability as well as be brave to point out wrongdoings towards ensuring adherence to good corporate governance.

"Apart from this, the regulators -- the Security Commission and Bursa Malaysia -- must ensure strict compliance to mandatory reporting requirements and corporate governance standards," he added. - Bernama