BNM to recommend administrative action against 1MDB
KUALA LUMPUR: Bank Negara Malaysia (BNM) will submit the recommendations for administrative enforcement to be taken against 1Malaysia Development Bhd (1MDB) by the end of April, for non-compliance with regard to its three investments abroad.
Speaking to a press conference in conjunction with the release of the central bank's annual report 2015, governor Tan Sri Zeti Akhtar Aziz said the submission will be made to Attorney-General Tan Sri Mohamed Apandi Ali, who has the final say on the case.
She revealed that the central bank had not received "documentary evidence" from 1MDB within the stipulated timeframe as requested.
"They've not fully complied with the bank's directive, so the bank is pursuing an appropriate administrative enforcement action as allowed to us by the law and the bank has commenced the due process," she said.
Zeti noted that the action taken against 1MDB could involve penalty, compound and other forms of recommendation.
"We've not yet submitted this, we plan to submit during the remaining part of my tenure," she added.
"(I) Recall that Bank Negara had in October revoked its permission for 1MDB's investments abroad totalling US$1.83 billion due to 'inaccurate or incomplete disclosure of information'."
The move was followed by an order to 1MDB to bring the money home.
1MDB had said the funds have either been spent or earmarked for a debt transfer, and therefore is unable to bring them back.
Of the US$1.83 billion, US$940 million is guaranteed by Aabar Investments and has been earmarked for a "debt for asset" swap with its AA-rated parent, International Petroleum Investment Co, while the remainder is linked to historic equity and loan investments in a joint venture with PetroSaudi in 2009.
Zeti also stressed that the recommended action taken against 1MDB showed the central bank's commitment towards upholding the integrity of the functioning financial system.
"Therefore, rules and regulations have been put in place to comply with, regardless of who the shareholders are," she reiterated.
1MDB did not respond to requests for comment as at press time.
Pointing out that it is different from criminal prosecution, Zeti said the action against 1MDB would not involve the court.
Meanwhile, 1MDB said it had yet to receive official notification of any action that BNM was planning to take against the group.
"We are, therefore, unable to comment further," it said in a statement today in response to media reports which quoted Zeti.
It said that 1MDB had in the course of the past 12 months fully cooperated to the extent possible with BNM investigations, including providing documentary evidence where available.
It also said it was committed to continued cooperation with BNM and would provide any further information that may be required, to the extent that 1MDB has in its possession or is possible under the law.