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Central bank says Malaysian fund broke forex rules, must pay
Najib Razak (AP/Joshua Paul)Malaysia's central bank said Friday a debt-laden state investment fund violated foreign exchange rules and must repatriate US$1
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Najib Razak (AP/Joshua Paul) (AP/Joshua Paul)
Najib Razak (AP/Joshua Paul)
Malaysia's central bank said Friday a debt-laden state investment fund violated foreign exchange rules and must repatriate US$1.83 billion it used abroad.
The central bank said 1MDB obtained permission for overseas investments based on "inaccurate or without complete disclosure of material information." The bank said therefore it revoked three approvals it previously granted for 1MDB investments and ordered the fund to repatriate the total of $1.83 billion to Malaysia.
No details were given on when the investments were made.
The central bank's move is a new blow to the fund, which was set up by Prime Minister Najib Razak in 2009 to develop new industries, but faces accusations of graft and mismanagement after it accumulated at least 42 billion ringgit ($10 billion) in debt.
The central bank began investigating the fund earlier this year and said it has recommended criminal prosecution of the fund.
The attorney general however, said Thursday that it had studied the central bank investigation report but found no wrongdoing by fund officials.
The police and the anti-corruption agency are separately still investigating the fund.
The 1MDB crisis has been partly blamed for the sharp plunge in the Malaysian ringgit, which last month fell to 17-year low against the ringgit. It also landed Najib in hot water especially after documents leaked in July showed he received some $700 million in his private accounts from entities linked to the fund.
Najib, who has denied any wrongdoing, later said the money was a donation from the Middle East. He fired a deputy who was critical of him, four other Cabinet members and the then-attorney general investigating him.
Malaysia's Conference of Rulers, comprising nine state rulers and governors of four other states, issued a rare statement this week calling for a quick and transparent investigation into the fund. They warned that the government's failure to give convincing answers and clarifications on 1MDB has led to a "crisis of confidence" in the country.
