The government’s admission yesterday that troubled 1Malaysia Development Berhad (1MDB) was based on a “wrong business model” has come too late, says Kuala Terengganu MP Datuk Raja Kamarul Bahrin Shah Raja Ahmad, who recalled that the failure of the state company had already been forewarned.
“What is unforgivable and totally irresponsible were the fact the federal government had been well forwarned of the impending high failure risks by a state government that refused to morgage its future away no matter how much arm twisting was applied,” he said in a statement today.
At the Dewan Rakyat yesterday, Deputy Finance Minister Johari Abdul Ghani told Parliament that 1MDB suffered from wrong business model, weak management and poor governance, adding that the government had never claimed that it was a good investment.
1MDB, the brainchild of Datuk Seri Mohd Najib Razak, was reorganised from the Terengganu Investment Authority (TIA) into a “sovereign fund” with Terengganu’s oil wealth as collateral.
Raja Bahrin said that the federal government had been warned by then Terengganu former menteri besar Datuk Seri Ahmad Said that it could “compromise Terengganu’s future”, and said the company was mired into further skepticism with the involvement of businessman Jho Low “who appeared to mastermind the scheme”.
“Even before any project was launched it was learnt some hundreds of millions was paid out as commisions to certain individuals,” said Raja Bahrin, adding that even a small state government could foresee the risks that Putrajaya with all its expertise could not.
“Is it negligence, irresponsible attitude or pure greed that lead to the present mess Malaysia is in today? These are questions being asked by Malaysians and the International community.”
He said that while 1MDB is being investigated by other countries, Malaysia had yet to find the culprits behind the scandal.
“1MDB was not based on a ‘wrong business model’ as said by the minister, but it was set up on a ‘known flawed business model’ rejected by the state government of Terengganu,” said Raja Bahrin.