Selangor Menteri Besar Azmin Ali’s plan for a state investment firm, Darul Ehsan Investment Group (DEIG) Sdn Bhd, has caught the interest of corruption watchdog, Center to Combat Corruption and Cronyism (C4).

C4 said the surprise move suggested the need to strengthen state assets and restructure all government-linked companies under MBI.

While Azmin said it will subscribe to the highest forms of governance, C4 said DEIG’s governance structure 'spells danger and comes with several glaring loopholes'.

“If anything must be learnt from the 1MDB crisis, it is that the principles of governance, openness and integrity must reflect the legal prerequisites of DEIG and must not and cannot be reflected in it only being responsible to its board of directors,” C4 directors said in a statement.

The statement was jointly signed by Simon Sipaun ( photo ) , Ahmad Farouk Musa, Cynthia Gabriel and Richard Yeoh.

DIEG's management was hotly debated in the Selangor legislative assembly yesterday with both BN and Pakatan Rakyat representatives calling for better accountability and transparency of the company.

Select Committee on Government Agencies, Statutory Bodies and State Subsidiary Companies (JP-Abas) chairperson Saari Sungib recommended that the DEIG be put on hold pending the submission of a white paper.

The Selangor government has issued a statement to address the concerns of politicians from both side of the divide.

Ensure open tender system

C4 said there must be transparent rules in the way companies and government-linked companies (GLC)s do business under the DEIG.

“Will it insist on open tender policies? Will it allow for direct negotiation? And under what circumstances?” the directors asked.

To prevent a repeat of the 1MDB scandal, C4 urge Azmin to establish an Ombudsman Office for Good Governance to provide essential oversight on the DEIG, and its operations.

The NGO said this will ensure the highest forms of accountability and transparency for Selangor investments and business entities.

They also asked that Azmin ( photo ) put in place proper audit systems and structure to account for the RM6.3 billion assets that will be managed by the DEIG, and that state laws to monitor, review and govern DEIG be enacted.

“Ensure, and make it compulsory for DEIG to table its financial reports periodically to the state legislative assembly of Selangor and restructure DEIG to answer to the state legislative assembly instead of only its board of directors to ensure transparency and accountability of its actions and expenditure,” C4 said.

“Put in place an open tender system for procurement and appointment of project partners or implementers so that any possibility of corrupt and crony practices can be avoided,” the NGO added.

“Now is the chance to prove that Selangor will take on higher standards of governance.”