1MDB investment decisions involving PetroSaudi made without detailed assessment

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) investment decisions in joint-venture companies involving PetroSaudi were made within eight days, without a detailed assessment process and before the issues or conditions raised by the 1MDB Board are resolved, the declassified auditor-general’s report on 1MDB released on Tuesday stated.

Joint-venture investments by controversial 1MDB with companies abroad began in 2009 with the intention of exploring investment opportunities overseas.

The first joint venture was signed between 1MDB, PetroSaudi Holdings (Cayman) Ltd and 1MDB PetroSaudi Ltd on Sept 28, 2009. 

1MDB holds a 40% equity interest with an investment contribution of US$1bil in cash while PetroSaudi Holdings (Cayman) Ltd holds 60% equity stake in the form of assets worth at least US$1.5bil.

In the report, it was noted that there were four different companies registered under the name of PetroSaudi but the proposed investment paper submitted to the Board of Directors of 1MDB did not include such information.

The asset valuation report prepared by Edward L. Morse was submitted on Sept 29, 2009, which was the same date of confirmation of his appointment by 1MDB Chief Executive Officer, and received one day after the JV agreement was signed. 

The assessment report takes into account assets on oil exploration and production rights in Turkmenistan and Argentina.”

An assessment was implemented on PetroSaudi International Ltd’s assets despite the JV agreement clearly stating that the company owning all the rights and interests of the agreed assets for the joint venture project is PetroSaudi International Cayman, the report said. 

Besides that, the JV agreement contained clauses that lacked in guarding the interests of the company. 

Among them was an advance received by 1MDB PetroSaudi Ltd amounting to US$700mil from its parent company, PetroSaudi Holdings (Cayman) Ltd on Sept 25, 2009, to be fully repayable on or before Sept 30, 2009. 

As of Sept 30, 2009, a total of US$1bil (RM3.487bil) was transferred by 1MDB into two separate accounts, with US$300mil into the joint venture account and US$700mil into another company’s account with the aim of repaying the advance taken by the joint venture company. 

Board approval of 1MDB was also not obtained before making the US$700mil payment into the account of the other company, the report stated. 

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

PetroSaudi , 1MDB


Next In Business News

U.S. weekly jobless claims edged lower last week
Govt channels RM20.94bil for wage subsidy programme as at July 29
Yinson inks MoU with Cyberview to develop smart mobility ecosystem in Cyberjaya
Bursa Malaysia onboards CGS-CIMB, Kenanga IB for shariah-compliant trading
Sunway REIT's outlook remains optimistic
Ringgit eases further as risk-off mode remains after Fed’s minutes
Gas Malaysia 2Q net profit surges 72%, declares 5.9 sen dividend
Dialog 4Q net profit drops 14% to RM118mil
AME Elite to develop industrial park in Penang with GDV of RM1bil
Bursa Malaysia ends lower for second consecutive day

Others Also Read