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Malaysia Premier Says 1MDB Fund Wrongdoing Larger Than Thought

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Malaysia
  • Malaysia Premier Says 1MDB Fund Wrongdoing Larger Than Thought

Malaysian Prime Minister Mahathir Mohamad said more wrongdoing occurred at state fund 1MDB than was publicly known, as he accelerates efforts to reopen a probe into the scandal-plagued company and the actions of his predecessor.

The government will reach out to authorities in Switzerland, the U.S., Singapore and other jurisdictions as it attempts to recover funds that were diverted from 1MDB, Mahathir told reporters on Wednesday.

A declassified Auditor General report on Tuesday did not bring massive surprises, and did not mention former premier Najib Razak by name. But it showed investigators expressed widespread concern about anomalies in 1MDB’s accounts, and said officers acted on investments against or without full knowledge of the board of directors on several occasions.

“The main issue is of corruption, particularly 1MDB as well as the money that was embezzled by the previous government,” Mahathir said. “I have been briefed by the police and the auditor general and it is very clear that there were more wrongdoings committed than what was known by the public and me.”

1MDB, set up in 2009 to fund domestic infrastructure projects and whose advisory board Najib once chaired, didn’t submit management accounts for the year ended March 2015 and bank statements from foreign financial institutions. The audit team said it couldn’t access computers, notebooks and servers at 1MDB for the purpose of crosschecking and analyzing its findings.

“Overall, corporate governance and internal controls in 1MDB were less than satisfactory,” the summary said. “Some actions by 1MDB’s management and decisions by the board of directors were carried out in a manner that wasn’t proper.”

The audit report on 1MDB had been protected since 2016 by the Official Secrets Act. Mahathir’s move to release it comes as he seeks to tighten the net around Najib, whom he defeated in an election last week, and other officials over the multi-billion dollar scandal surrounding the fund’s actions dating back some years. Mahathir has barred Najib from leaving Malaysia in the meantime.

“There is an aggressive push by the new administration to reopen criminal investigations on 1MDB against the former PM as well as other individuals,” said Nizam Ismail, head of regulatory practice at RHTLaw Taylor Wessing LLP in Singapore. “If there are new transaction trails being uncovered in Malaysia, this could impact financial institutions which had been involved in the money flows, in Singapore, Switzerland and beyond.”

Global Probes

Mahathir, who was once Najib’s mentor and ally and who is back in power after a prior stint as premier from 1981 to 2003, accused him repeatedly on the campaign trail of being a “thief” over alleged graft at 1MDB. Najib has denied any wrongdoing and was cleared by the attorney general at the time, while the fund has repeatedly denied any misconduct.

The 1MDB scandal spawned global probes as investigators tracked a money trail stretching from Switzerland to Singapore and the U.S. The Department of Justice alleges that $3.5 billion from the fund went missing.

Malaysian financier Low Taek Jho has been ordered by a U.S. court to turn over his $250 million yacht “Equanimity” to the U.S. authorities who plan to sail it from Indonesia and sell it in the U.S. The yacht is among more than $1.5 billion in assets that the U.S. claims Low and his accomplices acquired with money they siphoned from 1MDB.

Debt Payments

The declassified report found, among others things, that 1MDB used 288 million ringgit ($73 million) of government funds to pay interest on its debt, which went against the monies’ original purpose. 1MDB raised 3.98 billion ringgit from domestic debt and sukuk issuance, of which only 246 million ringgit was invested in two property projects, while 2.16 billion ringgit was advanced to the company. 1MDB said in March all its funds are fully accounted for.

Swiss prosecutors said Tuesday they wanted to start talks with investigators in Malaysia as soon as possible to better coordinate various criminal probes into the sprawling case.

The Office of the Attorney General of Switzerland “is very much interested in renewing dialogue with the competent authorities in Malaysia” and “favors an exchange between partnering authorities at their earliest convenience,” it said in an email.

Singapore authorities also weighed in. The city-state has cooperated extensively with their Malaysian counterparts on past requests on the matter and is ready to extend further assistance, the Monetary Authority of Singapore and the Commercial Affairs Department said in an email early Wednesday.

Swiss Attorney General Michael Lauber has been publicly critical of the lack of cooperation his team of prosecutors got from Najib’s government. Singapore has punished banks over lapses related to 1MDB, seized assets and jailed bankers over the scandal.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Government

Senate Suspends Senator Abdul Ningi for 3 Months Over Budget Padding Allegations

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Abdul-Ahmed-Ningi

The Senate has announced the suspension of Senator Abdul Ningi for three months following his allegations of budget padding to the tune of N3.7 trillion in the 2024 budget.

Ningi, who represents Bauchi Central and chairs the Senate Committee on Population, had made the claims in a recent interview with the Hausa service of the BBC.

During a plenary session, Senator Olamilekan Adeola, the Chairman of the Senate Committee on Appropriations, raised a motion to address Ningi’s allegations, citing the urgent need to address what he termed as “false allegations.”

The transcript of Ningi’s interview was read on the Senate floor, prompting deliberation on the appropriate action to take.

Initially, Senator Jimoh Ibrahim proposed a 12-month suspension for Ningi, but Senator Chris Ekpeyong moved to reduce it to six months.

Eventually, Senator Garba Maidoki amended the motion further, suggesting a three-month suspension.

The amended motion was put to a voice vote, and Senate President Godswill Akpabio announced the decision to suspend Ningi for three months.

Following the ruling, Ningi was escorted out of the Senate chamber by the Sergeants-at-arms.

The suspension comes amidst division within the Senate over Ningi’s claims, with some senators disowning his allegations and calling for a thorough investigation.

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Ekiti Governor Unveils Multi-Billion Naira Relief Programmes Amid Economic Crisis

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Biodun Oyebanji

Ekiti State Governor, Mr. Biodun Abayomi Oyebanji, has announced a comprehensive relief package aimed at alleviating the hardship faced by the people of the state.

The relief programs encompass various sectors to cushion the impact of the economic downturn.

One of the key initiatives entails clearing salary arrears amounting to over N2.7 billion owed to both State and Local Government workers.

This move signifies the government’s commitment to addressing the financial burdens faced by its workforce.

Furthermore, Governor Oyebanji has approved a substantial increase of N600 million per month in the subvention of autonomous institutions, including the Judiciary and tertiary institutions.

This augmentation is intended to enable these institutions to implement wage awards in alignment with State and Local Government workers’ salaries.

In addition to addressing salary arrears, the relief programs extend to pensioners, with the approval of payments totaling N1.5 billion for two months’ pension arrears.

Moreover, an increase in the monthly gratuity payment to state pensioners and local government pensioners will provide additional financial support, totaling N200 million monthly.

The relief initiatives also encompass agricultural and small-scale business sectors.

The allocation of funds for food production and livestock transformation projects underscores the government’s commitment to enhancing food security and economic sustainability at the grassroots level.

Governor Oyebanji emphasized that these relief programs are part of the state’s concerted efforts to mitigate the adverse effects of the economic downturn and foster shared prosperity.

The comprehensive nature of the initiatives reflects a proactive approach towards addressing the challenges faced by Ekiti State residents.

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President Tinubu Orders Immediate Settlement of N342m Electricity Bill for Presidential Villa

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power project

President Bola Tinubu has directed the prompt settlement of a N342 million outstanding electricity bill owed by the Presidential Villa to the Abuja Electricity Distribution Company (AEDC).

This move comes in response to the reconciliation of accounts between the State House Management and the AEDC.

The AEDC had earlier threatened to disconnect electricity services to the Presidential Villa and 86 Federal Government Ministries, Departments, and Agencies (MDAs) over a total outstanding debt of N47.20 billion as of December 2023.

Contrary to the initial claim by the AEDC that the State House owed N923 million in electricity bills, the Presidency clarified that the actual outstanding amount is N342.35 million.

This discrepancy underscores the importance of accurate accounting and reconciliation between entities.

In a statement signed by President Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, the Presidency affirmed the commitment to settle the debt promptly.

Chief of Staff Femi Gbajabiamila assured that the debt would be paid to the AEDC before the end of the week.

The directive from the Presidency extends beyond the State House, as Gbajabiamila urged other MDAs to reconcile their accounts with the AEDC and settle their outstanding electricity bills.

The AEDC, on its part, issued a 10-day notice to the affected government agencies to settle their debts or face disconnection.

This development highlights the importance of financial accountability and responsible management of public utilities.

It also underscores the necessity for government entities to fulfill their financial obligations to service providers promptly, ensuring uninterrupted services and avoiding potential disruptions.

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