KUALA LUMPUR: 1Malaysia Development Berhad’s (1MDB) Board of Directors today collectively offered their resignation, following the Public Accounts Committee’s (PAC) tabling of the company’s audit report in the Dewan Rakyat this morning.
1MDB chief executive officer and president Arul Kanda Kandasamy said the board of directors, including him, had collectively sent a resignation letter to the Minister of Finance Inc (MOF Inc) earlier today.
"All six directors have collectively agreed to resign from our posts following the success of the rationalisation plan and to facilitate investigation and recommendations suggested in the PAC report.
"It is now up to MOF Inc to as the sole shareholder to accept our resignation. At the same time, it is the best thing for us to do since PAC had already suggested that an investigation should take place," said Arul in an interview today.
1MDB's board of directors comprise Tan Sri Che Lodin Wok Kamaruddin as chairman, Tan Sri Ismee Ismail, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ong Gim Huat, Ashvin Jethanand Valiram and Arul Kanda.
Arul Kanda said he would cooperate with the relevant authorities if there is any subsequent investigation after the PAC report.
Based on the report, Arul said there was no criminal element in the management of 1MDB, but only weaknesses that would need to be rectified.
"I am not running away. I can still be called in to assist investigations, if there is any. I feel glad that the PAC's report have revealed the truth. All criticism and allegations have been answered in the report."
In a statement earlier, the 1MDB board said it was a “difficult decision,” but ultimately the “right” one, as the move will “facilitate any follow-up investigations as recommended by the PAC.”
1MDB referred to the PAC report as “comprehensive and conclusive document” that dismissed numerous allegations against the company.
“More importantly, the funds of 1MDB have been fully accounted for and there is no case of ‘RM 42 billion missing’, as has been alleged by some irresponsible parties.
“It has also been confirmed that 1MDB did not transfer RM 2.6 billion to the personal accounts of the Prime Minister as had been alleged,” it said.
1MDB also acknowledged the weaknesses of its governance, highlighted in the PAC report, something which the company understands in hindsight.
“However, it is important to understand that the decisions were made in the context of specific transactions at that point in time.
“Furthermore, 1MDB is a complex company, with multiple roles of undertaking large strategic projects, establishing collaboration with foreign government entities and attracting foreign direct investment (FDI) to Malaysia.
"With only RM 1 million of cash equity, 1MDB had to rely heavily on loans to finance its strategic investments, and despite this, the board of 1MDB has governed it in a manner where which it would not be a “financial burden” to the nation," it said.
“In particular, the moment a cash-flow mismatch was identified in November 2014, the Board acted immediately to appoint a professional restructuring specialist to lead 1MDB.
“This led to a strategic review being conducted, which resulted in the success of the on-going rationalisation plan that has resolved 1MDB's debt burden,” the company said.
1MDB also stressed that its board has fulfilled its responsibilities to the best of its ability and cooperated fully with all the investigating authorities probing the company. Additional reporting by James Sivalingam