THE corporate governance and internal controls of 1Malaysia Development Bhd (1MDB) were found to be “less than satisfactory” in the Auditor-General’s Department’s audit.

The declassified 1MDB audit report showed the sovereign fund’s management and board of directors had made decisions on investments without due process.

“Between 2009 and 2015, several important investment decisions involving large sums were made through written resolutions by the Board of Directors without any discussion and proper detailed valuation.

“Several investments were decided on short notice and were high risk.

“However, the board told the Public Accounts Committee (PAC) on January 19, 2016 that discussions were held before approvals were given through written resolutions.”

The department also found that the 1MDB management presented information that were incomplete or inaccurate to the board before important decisions were made.

“In fact, the management sometimes took action without approval from the board,” the report stated.

MDB management had also on several occasions presented information that was inaccurate or did not correlate with other interested parties, the department found in the audit.

“In several incidents involving investments, the 1MDB management also acted against or without fully complying with the decisions made by the board of directors or shareholders,” the report said.

1MDB’s recordkeeping and filing was also unsystematic and ill-maintained, the report said.

The audit report on 1MDB, the brainchild of former prime minister Najib Razak, was classified as “confidential” on January 22, 2016. It was tabled to the PAC on March 4 the same year.

In a statement today, Auditor-General Dr Madinah Mohamad, who attended a meeting with Prime Minister Dr Mahathir Mohamad this morning, said the report had been reclassified as an open document and its executive summary was accessible at www.audit.gov.my.

In his nationwide roadshows during the elections, 1MDB chief executive officer Arul Kanda Kandasamy admitted the fund’s troubles were caused by bad business decisions.

“They are business problems. Not knowing how to do business, incurring too much debt, weak governance and poor supervision,” he said.

He said 1MDB’s debts had amounted to RM42 billion but had since been reduced to RM31 million, adding that the company’s assets were enough to cover the debts.

1MDB’s financial exploits are the subject of investigation in at least three countries, including Singapore, Switzerland and the US. It is alleged that its funds were siphoned and used to purchase luxury properties and assets overseas by individuals connected to the former prime minister Najib Razak.

The present Pakatan Harapan federal administration headed by Dr Mahathir has pledged to reopen investigation into the case, after previous efforts were stonewalled by the previous administration. – May 15, 2018.