In what could be interpreted as the first strike on Prime Minister Najib Abdul Razak from within Umno, a police report has been lodged against his debt-ridden brainchild 1Malaysia Development Bhd (1MDB) and its directors.

The report filed by a Penang Umno division leader comes on the heels of former prime minister Dr Mahathir Mohamad's disappointment that the 1MDB issue was not raised during last month's Umno general assembly.

Former information minister Zainuddin Maidin had also warned that while Najib might have secured a lifeline by maintaining the Sedition Act, the writing is on the wall.

In his police report, Batu Kawan Umno division vice-chairperson Khairuddin Abu Hasan (left) listed a slew of issues to be investigated about 1MDB.

It came as no surprise that Khairuddin also said that Mahathir was disgruntled with the ailing firm as well.

He also warned that if no action is taken, he would file another police report against Najib in his capacity as finance minister.

Next week, Khairuddin is planning to lodge a complaint with the Malaysian Anti-Corruption (MACC) as well.

"I feel suspicious and am doubtful of the financial management of 1MDB, which is not transparent.

"Since March 2014, 1MDB has accumulated a debt of RM41.9 billion which, is a high possibility that it faces bankruptcy.

"This will be a waste of the people's money and also burden the government as the company's guarantor," Khairuddin said.

Previously, 1MDB - which has also been in the crosshairs of the opposition - always claimed that its dealings were done above board.

Khairuddin said the police should do a "detailed and comprehensive" investigation and question those involved.

Multiple weaknesses

The Umno man said he decided to lodge the report after studying various news reports including those done internationally which showed multiple weaknesses in the project.

"I have studied the reports that were published on 1MDB in the past few months and found that there were a lot of discrepancies.

"As a concerned Malaysian, I have decided to make the report for the good of all Malaysians, to investigate a company which is responsible for a portion of public funds," he added.

Among the issues cited by Khairuddin in his report were:

  • The procedure 1MDB follows in raising funds from overseas and in disbursing its funds.

   

  • 1MDB paying interest at rates higher than the market rate.

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  • 1MDB paying fees considered excessive to Goldman Sachs International.

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  • The less-than-transparent parking of funds overseas, specifically in the Cayman Islands.

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  • Detailed investigation on the debts of 1MDB which have reached over RM41.9 billion as of March 2014.

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  • Petaling Jaya Utara MP Tony Pua's statement that the Finance Ministry had issued a letter of support to guarantee 1MDB’s loans and Deputy Finance Minister Ahmad Maslan's subsequent assertion that no such letter was issued.

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  • The workings of 1MDB subsidiaries, 1MDB Global Investments Ltd and 1MDB Energy Ltd should also be investigated by the Malaysian Anti-Corruption Commission (MACC).

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  • Purchase of energy assets from Powertek Energy and Sanyen Power Sdn Bhd at prices higher than the market value.

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  • Purchase of 234 acres of land in Air Itam at RM1.38 billion, which will be difficult to recover from the proposed housing projects of 6,666 units of low cost houses and 3,333 units of affordable houses.

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  • High payment of RM10.5 billion that was made for purchasing energy assets which yielded low returns.

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  • The US$1.2 billion investment in PetroSaudi International Ltd, which was done without transparency.

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  • Parking of US$2.32 billion in a Swiss Bank account in Cayman Islands.

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  • Purchase of land from Tadmax Resources Bhd in Pulau Indah for RM317 million.

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  • Purchase at premium price of the site for the Tun Razak Exchange project.
    • In an email to Malaysiakini later, 1MDB said it is confident that the police report is baseless.

    "We are confident that it will have no legal basis. We welcome any investigation into our affairs and the opportunity to rebut malicious allegations," it said.

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