Finance Minister Lim Guan Eng says he has instructed his ministry to take the steps to appoint PricewaterhouseCoopers to conduct a special position audit and review of 1MDB. - NSTP/Mohd Fadli Hamzah

PUTRAJAYA: A member of 1Malaysia Development Berhad's (1MDB) board of directors used the word 'scam' to describe some investments made by the sovereign fund.

Speaking to reporters at a press conference, here, Finance Minister Lim Guan Eng said 1MDB director Datuk Kamal Mohd Ali stated this during a meeting today.

Lim met with 1MDB chief executive officer Arul Kanda Kandasamy and separately with two of its directors, Datuk Norazman Ayob and Kamal today to find out the status of 1MDB's finances, especially on its ability to pay its debts.

In the meeting with the directors, Lim said he had asked them on 1MDB's investment 'units' worth USD940 million (RM3.75 billion) which was previously held with the BSI Bank in Singapore and its USD1.56 billion (RM6.22 billion) worth of overseas investment funds belonging to 1MDB Global Investments Ltd.

"Together, these investments are worth purportedly some RM9.8 billion, which if redeemed, would be more than sufficient to meet 1MDB's financial obligations for the next few years," Lim said.

"The board of directors claimed they have repeatedly disputed the value and even the existence of these investments during the monthly board meetings.

"This is because the 1MDB management has repeatedly failed to supply the board with any evidence over the existence of these investments over the past two years," he said.

Lim added that Kamal called these 1MDB investments a 'scam'.

Commenting further, Lim said 1MDB's former chief financial officer Azmi Tahir said the investments existed even though BSI Bank has wound up.

"He gave the unbelievable excuse that the fund managers refused to communicate with 1MDB in writing because of the ongoing investigations by the United States Department of Justice (US DoJ)," Lim added.

Meanwhile, Arul Kanda claimed that all financial matters were handled strictly by the company CFO and he was uncertain as to what the value of these investments were, or whether they existed, according to Lim.

"It is completely unbelievable that a highly paid and 'experienced' investment banker can be so irresponsibly clueless as to not know whether RM9.8 billion worth of investments are even real."

Lim remarked that the response given by Arul Kanda was shocking because previously, he had travelled across the country to provide briefing sessions on 1MDB to the public.

"In fact, Arul is today singing a completely different tune from the songs he sang to the Public Accounts Committee (PAC) as recorded in the (Parliament) Hansard," Lim said, adding that he has instructed the legal advisers to the Finance Ministry to review Arul Kanda's position as the president of 1MDB.

Apart from that, Lim said he instructed his ministry to take the steps to appoint PricewaterhouseCoopers (PwC) to conduct a special position audit and review of 1MDB so that Malaysians would know the true financial state of affairs of the sovereign fund.

"We would then be able to determine the cost of the shenanigans to the tax-payers. We will submit the PwC report to the 1MDB Special Committee set up by the Prime Minister once it is completed," Lim added.

Reporting by Ooi Tee Ching and Hazwan Faisal Mohamad