1MDB to transfer assets to MoF Inc
(The Sun Daily) – The Ministry of Finance announced yesterday that the assets and subsidiaries of 1Malaysia Development Bhd (1MDB) will be transferred to The Minister of Finance Incorporated (MoF Inc), its board of advisers dissolved and a new board of directors be appointed, in keeping with recommendations by the Public Accounts Committee (PAC) report.
It will also remove the controversial Article 117 and change all references from “Prime Minister” to “Minister of Finance”.
Article 117 in 1MDB’s memorandum and articles of association (M&A) was first included when the investment fund was known as the Terengganu Investment Authority (TIA). It was renamed 1MDB in 2009.
The 1MDB clause requires the prime minister to sign off on major decisions, including all financial commitments. The clause was put in after the government guaranteed a RM5 billion sukuk, which TIA issued.
The Finance Ministry said after a detailed study and deliberation, MoF Inc agreed to fully implement the recommendations in the Public Accounts Committee report on 1MBD (PAC Report). MoF Inc fully owns 1MDB.
In a statement released yesterday, the government treasurer said 1MDB will transfer ownership of Bandar Malaysia Sdn Bhd, TRX City Sdn Bhd, Air Itam lands and Pulau Indah land to MoF Inc.
The PAC, in its 106-page report on 1MDB tabled in Parliament on April 7, had suggested the transfer of all 1MDB’s assets and subsidiaries to MoF Inc as it would allow for closer scrutiny of the state investor’s assets and companies.
“In line with the governance changes and asset transfers, MoF Inc hereby confirms its acceptance of the resignation of the 1MDB board of directors, effective May 31, 2016,” it said.
MoF Inc said it will appoint new board members to reflect the limited business profile of 1MDB.
According to 1MDB’s website, its board of directors comprise chairman Tan Sri Lodin Wok Kamaruddin, president Arul Kanda Kandasamy, former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail, Tan Sri Ong Gim Huat and Ashvin J. Valiram. The current board members had on April 7 offered to resign.
Arul Kanda, however, will remain in his role as president of 1MDB until further notice, MoF Inc said. “He will continue to focus on his specific mandate to implement the rationalisation plan, which will include resolution of the recent contractual dispute with International Petroleum Investment Company.”
MoF Inc also announced that the board of advisers of 1MDB, which is chaired by Prime Minister Datuk Seri Najib Abdul Razak, will be dissolved under the changes to the fund’s governance.
