Promise

Resolve 1MDB, FELDA, MARA and TABUNG HAJI MEGA SCANDALS

Analysis

1MDB

Former Prime Minister Najib Razak has been charged for his alleged involvement in the 1MDB corruption scandal. In reference to the alleged corruption of RM42 million involving SRC International, a subsidiary of 1MDB, the former Prime Minister is currently facing 7 charges under section 23(1) of the Malaysian Anti-Corruption Commission Act 2009 for abuse of power, section 409 of the Penal Code for criminal breach of trust, and section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. Given the seriousness of the 1MDB corruption scandal, the government’s swift move to bring the perpetrators to justice is commendable.

FELDA

Former FELDA chairman Mohd Isa Abdul Samad was charged on 14 December 2018 for criminal breach of trust under section 409 of the Penal Code for approving the purchase of Merdeka Palace & Suites Hotel in Sarawak without the consent of the Felda board of directors. He was also charged under section 16(a)(A) of the Malaysian Anti-Corruption Commission Act 2009 for receiving bribes totalling to RM3.09 million from Gagasan Abadi Properties Sdn Bhd.

On 11 April 2019, the government presented the White Paper on FELDA in Parliament where it highlighted malpractices committed by the previous government. It also confirmed, among others, that political parties received financing from FELDA up to 2.7 billion. The White Paper proposed a number of solutions aimed at reforming this institution. The solutions are:

  1. Restructuring;
  2. Disposing of non-profitable assets;
  3. Strengthening of corporate governance of Felda; and
  4. Guaranteeing the provision of welfare aid to the Felda settlers.

While the government’s determination to address the FELDA corruption scandal are assuring, we recommend that further action be taken to ensure that the root of the problem is completely removed. To strengthen the initiatives spelt out in the White Paper, it is imperative that:

  1. Swift criminal action also be taken against the board of directors for failing to carry out their duties in preventing such abuses;
  2. FELDA and its subsidiary companies be monitored by a Parliamentary select committee tasked with evaluating their financial and non-financial performance. The select committee should be given the power to conduct an inquiry, compel attendance to its hearing, and demand production and inspection of documents. The inquiry should be made public with settlers given a chance to participate in them.
  3. FELDA settlers be given greater participation in the FELDA decision-making process. Their representation on the FELDA Board and in the agency’s companies should be increased to enable them to co-manage the businesses.
  4. FELDA and other GLCs no longer serve as vehicles for political financing. This must be reflected in the new legislation on political financing.
  5. The government speed up the establishment of the office of the Ombudsman to supervise the conduct of government administration which is key to enhancing and strengthening corporate governance and accountability. The Ombudsman office must be an independent institution and must act as an independent officer with the responsibility to investigate the actions of government institutions and with an independent complaints commission for GLCs and statutory bodies.
  6. A Public Sector Malfeasance Act be enacted to prevent those holding public office from misusing their power and inflicting loss and damages on government institutions.

MARA

No action has been taken to date to investigate malpractices surrounding MARA even though it was reported in January this year that a controversial purchase of the UniLodge building in Melbourne by Mara Incorporated Sdn Bhd was based on bloated valuations by the Malaysian branch of Raine and Horne. The government’s inaction as regards the immense corruption in MARA despite the existence of compelling evidence is extremely concerning.

TABUNG HAJI

An internal probe into Tabung Haji’s past transactions was carried out in July 2018. On 17 January 2019, former Tabung Haji chairman Abdul Azeez Abdul Rahim was charged:

  1. Under section 16(a)(A) of the Malaysian Anti-Corruption Commission Act 2009 for receiving RM1.2 million, RM2 million and RM2 million in three transactions as a reward for himself in assisting a company to obtain government projects;
  2. Under section 4(1)(b) of the Anti-Money Laun­dering Act, Anti-Terrorism Finan­cing Act and Proceeds of Unlawful Activities Act 2001 for receiving proceeds of unlawful activities amounting to RM139.4 million from four companies.

A special briefing was held in Parliament early April where it was revealed that Tabung Haji suffered further losses of RM10 billion. It is important to note that part of the losses were linked to Felda Global Ventures (FGV) shares being bought at inflated prices.

Despite the severity of the Tabung Haji corruption scandal, Minister in the Prime Minister’s Department Dr Mujahid Yusof Rawa said there is no necessity for a Royal Commission of Inquiry to be set up for the Public Accounts Committee (PAC) to initiate an investigation. The government’s decision to not publicly probe into the corruption in Tabung Haji that cost billions of taxpayer money is without a doubt a step backwards.

FELDA White Paper Infographic Poster

Azmin Ali, the Minister for Economic Affairs released a FELDA White Paper 10 April 2019. This inforgraphic poster was bsed on his speech in parliament. One of the most shocking things his speech was that FELDA had an average cash balance of RM2.5 billion between 2007 – 2011. They only had RM35 million in cash on 9 May 2018!

Sub-promises

Investigate Mega Scandal – ​FELDA

3 July 2019 – Prime Minister Tun Dr Mahathir Mohamad is expected to announce a new Federal Land Development Authority (Felda) initiative at the national-level of the Felda Settlers’ Day celebration to be held at Felda Selancar 3 in Muadzam Shah here on Sunday.

2 May 2019 – There is talk of FELDA taking back its plantations, which would seem like a nightmare for FGV and its shareholders.

11 April 2019FELDA’s White Paper Confirms Massive Fraud! Time to Charge the culprits!!

The Centre to Combat Corruption and Cronyism (C4) is deeply concerned with the findings of the government’s White Paper on the Federal Land Development Authority (FELDA) which was tabled in the Dewan Rakyat today by Economic Affairs Minister Datuk Seri Muhamed Azmin Ali. (C4 Press statement)

10 April 2019Bad business decisions by Felda Global Ventures Bhd (FGV) and Felda Investment Corporation (FIC) are the main cause of Felda’s current cash flow problems. According to the government’s White Paper on Felda, the federal agency – through its companies FGV and FIC – indulged in “aggressive” and “uncontrolled” investments that did not generate expected returns. “Decisions were made without planning or due diligence, which exposed Felda and FIC to risk of losses due to investments in companies that were not strategic,” read the document.

10 April 2019Economic Affairs Minister Datuk Seri Mohamed Azmin Ali, in tabling a White Paper – Towards the Sustainability of FELDA – in the Dewan Rakyat, said the government has agreed to provide the money by way of grants, loans and government guarantees in stages in accordance with the needs of a new business model for the management of FELDA.

9 Apr 2019PUTRAJAYA’S white paper on Felda will expose how the former management was “fraudulent and irresponsible”, which plunged the historic land scheme into serious debts, said Economic Affairs Minister Azmin Ali. 

9 April 2019Felda lodged a police report yesterday claiming it was cheated by Najib Razak into investing US$505 million (RM2.3 billion, according to Felda) in an Indonesian plantation firm owned by a friend of the former prime minister.

8 April 2019 – White Paper contains measures proposed to strengthen Felda’s financial position for the betterment of its settlers, including the new business model.

4 Apr 2019 – The case involving former Felda chairman Mohd Isa Abdul Samad, who was charged with one count of criminal breach of trust (CBT) and nine counts of receiving gratification totalling more than RM3 million, has been transferred to the high court.

3 April 2019 – Felda white paper to be tabled next Wednesday. The white paper will also touch on the cost of living allowance issue and initiatives taken.

3 April 2019 – Former Federal Land Development Authority (Felda) chairman Tan Sri Mohd Isa Abdul Samad’s criminal breach of trust (CBT) and corruption case concerning the purchase of a Kuching hotel has been transferred from the Sessions Court to the High Court.

27 Feb 2019 – The much-anticipated White Paper, will, among others, focus on strategic rehabilitation plans with 31 initiatives as part of a transformation scheme, along with a turnaround plan that includes the sale of properties.

17 Dec 2018 – Former FELDA chairman was charged for criminal breach of trust over the acquisition of hotel and suites.

17 Dec 2018  – Tan Sri Mohd Isa Abdul Samad, former FELDA chairman was charged for criminal breach of trust over the acquisition of hotel & suites on 14 Dec 2019.

13 Dec 2018Felcra Bhd has lodged a MACC report after an external audit revealed several discrepancies.

Investigate Mega Scandal – ​ 1MDB

21 June 2019: The Malaysian Anti-Corruption Commission (MACC) has filed 41 civil forfeiture suits to recover RM270 million belonging to 1Malaysia Development Berhad (1MDB) that was dispersed from Datuk Seri Najib Razak’s AmBank account.

7 May 2019 – U.S. Returns Seized ‘Wolf of Wall Street’ Millions to Malaysia. The first tranche of recovered funds from the multibillion-dollar scandal have been returned.

The 1MBD scandal, in which an estimated $4.5 billion was illegally siphoned out of Malaysia and used to finance extravagant lifestyles and purchase luxury properties in New York and L.A., artwork, private jets, yachts and even a major foray into Hollywood, appears to be reaching its own endgame.

16 April 2019 – The trial of Datuk Seri Najib Razak and former 1Malaysia Development Berhad (1MDB) chief executive officer Arul Kanda Kandasamy who were charged with tampering an audit report on the state fund is set to commence in November.

15 April 2019 – The first of Datuk Seri Najib Razak’s trials in relation to scandal-ridden fund 1Malaysia Development Bhd began last Wednesday (April 3), despite efforts to delay the trial.

The ex-Prime Minister has gone to court to face seven charges over the misappropriation of RM42 million from SRC International Sdn Bhd, a former subsidiary of 1MDB.

With around 7,000 pages of documents, possibly up to 60 witnesses, 26 lawyers and seven charges, it may be challenging to follow the case.

5 Apr 2019FORMER prime minister Najib Razak’s 1Malaysia Development Bhd trial will begin on May 14 and take up a further five days next month, the Kuala Lumpur High Court ruled today. 

5 Apr 2019 – Kuala Lumpur High Court ruled that former PM’s1MDB trial will begin on May 14. 

4 Apr 2019 – The government is considering selling some of its assets to further trim the national debt that is currently at valued RM686 billion. In light of recent scandals, Dr. M said any government assets sold, particularly land, would only be to Malaysians.

4 Apr 2019 – Gov. received a US$126 million (RM 514 million) offer for the superyacht Equanimity as part of an effort to recover and dispose of assets allegedly acquired using stolen 1MDB funds.

18 Mar 2019 – A Malaysian court set a new pretrial hearing date for the criminal case against Goldman Sachs Group Inc. relating to the state investment fund 1MDB.

14 Mar 2019 – The case involving former Prime Minister Datuk Seri Najib Tun Razak and 1Malaysia Development Berhad (1MDB) former chief executive officer Arul Kanda Kandasamy for alleged tampering of the 1MDB final audit report will be heard at the High Court.

18 Mar 2019 – A Malaysian court set a new pretrial hearing date for the criminal case against Goldman Sachs Group Inc. relating to the state investment fund 1MDB.

13 Dec 2018 – Former PM  facing charge of tampering with the audit report on the 1MBD fund, where billions of ringgit had allegedly been siphoned off before the report was finalised and submitted to the Public Accounts Committee.

25 Oct 2018The former PM is facing 38 charges of money laundering, abuse of power, and criminal breach of trust involving 1MDB and its former subsidiary SRC International Sdn Bhd.

3 July 2018Malaysia’s disgraced former prime minister Najib Razak, who is to be charged in court on Wednesday in connection with the multibillion-dollar financial scandal at the 1MDB state fund he helped set up, is facing the prospect of a lengthy jail term

7 May 2019 – U.S. Returns Seized ‘Wolf of Wall Street’ Millions to Malaysia. The first tranche of recovered funds from the multibillion-dollar scandal have been returned.

The 1MBD scandal, in which an estimated $4.5 billion was illegally siphoned out of Malaysia and used to finance extravagant lifestyles and purchase luxury properties in New York and L.A., artwork, private jets, yachts and even a major foray into Hollywood, appears to be reaching its own endgame.

16 April 2019 – The trial of Datuk Seri Najib Razak and former 1Malaysia Development Berhad (1MDB) chief executive officer Arul Kanda Kandasamy who were charged with tampering an audit report on the state fund is set to commence in November.

15 April 2019 – The first of Datuk Seri Najib Razak’s trials in relation to scandal-ridden fund 1Malaysia Development Bhd began last Wednesday (April 3), despite efforts to delay the trial.

The ex-Prime Minister has gone to court to face seven charges over the misappropriation of RM42 million from SRC International Sdn Bhd, a former subsidiary of 1MDB.

With around 7,000 pages of documents, possibly up to 60 witnesses, 26 lawyers and seven charges, it may be challenging to follow the case.

5 Apr 2019 – Kuala Lumpur High Court ruled that former PM’s1MDB trial will begin on May 14. 

4 Apr 2019 – The government is considering selling some of its assets to further trim the national debt that is currently at valued RM686 billion. In light of recent scandals, Dr. M said any government assets sold, particularly land, would only be to Malaysians.

4 Apr 2019 – Gov. received a US$126 million (RM 514 million) offer for the superyacht Equanimity as part of an effort to recover and dispose of assets allegedly acquired using stolen 1MDB funds.

18 Mar 2019 – A Malaysian court set a new pretrial hearing date for the criminal case against Goldman Sachs Group Inc. relating to the state investment fund 1MDB.

14 Mar 2019 – The case involving former Prime Minister Datuk Seri Najib Tun Razak and 1Malaysia Development Berhad (1MDB) former chief executive officer Arul Kanda Kandasamy for alleged tampering of the 1MDB final audit report will be heard at the High Court.

18 Mar 2019 – A Malaysian court set a new pretrial hearing date for the criminal case against Goldman Sachs Group Inc. relating to the state investment fund 1MDB.

13 Dec 2018 – Former PM  facing charge of tampering with the audit report on the 1MBD fund, where billions of ringgit had allegedly been siphoned off before the report was finalised and submitted to the Public Accounts Committee.

25 Oct 2018The former PM is facing 38 charges of money laundering, abuse of power, and criminal breach of trust involving 1MDB and its former subsidiary SRC International Sdn Bhd.

3 July 2018Malaysia’s disgraced former prime minister Najib Razak, who is to be charged in court on Wednesday in connection with the multibillion-dollar financial scandal at the 1MDB state fund he helped set up, is facing the prospect of a lengthy jail term

Investigate Mega Scandal – ​Tabung Haji

5 Apr 2019A SPECIAL briefing on Wednesday for Pakatan Harapan lawmakers on the Tabung Haji controversy revealed the fund suffered losses amounting to RM10 billion which were kept off the books.

5 Apr 2019 – A briefing for Pakatan Harapan lawmakers on the Tabung Haji controversy revealed the fund suffered losses amounting to RM10 billion which were kept off the books.

4 April 2019 – Dr. M says the Cabinet will discuss TH’s financial position and the fund’s ability to pay dividends to depositors.

27 Mar 2019 – Lembaga Tabung Haji (TH) has managed to restore its balance sheet following the transfer of its underperforming assets to special-purpose vehicle (SPV) Urusharta Jamaah Sdn Bhd.

17 April 2019 – Former Tabung Haji chairman Datuk Seri Abdul Azeez Abdul Rahim has claimed trial to 12 counts of graft amounting to RM5.2mil and money laundering totalling RM139.4mil over the procurement of government contracts.

His older brother Datuk Abdul Latif was also hauled to the court for allegedly abetting him on two occasions.

Abdul Azeez, who is Baling MP, is accused of receiving RM1.2mil, RM2mil and RM2mil in three transactions from company director Mo­­ham­mad Redzuan Mohanan Ab­­dullah as a reward for himself in assisting Menuju Asas Sdn Bhd obtain government projects.

The projects, valued at RM842.2mil, involved upgrading and building of roadwork in Perak and Kedah.

5 April 2019A SPECIAL briefing on Wednesday for Pakatan Harapan lawmakers on the Tabung Haji controversy revealed the fund suffered losses amounting to RM10 billion which were kept off the books.

“Yesterday’s revelations were a real shock to us. We knew that in 2017, there was a deficit of RM4.1 billion, but there were (loss) figures that were unrecorded. And yesterday, this was explained in a detailed and clear manner,” said Johor Baru MP Akmal Nasurullah Mohd Nasir.

15 Jan 2019 – Baling MP Datuk Seri Abdul Azeez Abdul Rahim and his brother Datuk Abdul Latif Abdul Rahim have been arrested by the Malaysian Anti-Corruption Commission (MACC).

They were arrested at about 4.30pm at the MACC headquarters in Putrajaya for a case involving corruption and money laundering.

19 Dec 2018 – TH’s COO has been remanded as the MACC conducts a probe against him. Police reports have been lodged on former CEO and four senior management staff over misuse of funds and wrongful conduct in a corporate deal.

Review Governance structure of 1MDB, FELDA, MARA and TH to ensure an effective check and balance

8 April 2019 – White Paper will contains measures proposed to strengthen Felda’s financial position for the betterment of its settlers, including the new business model.

3 Apr 2019THE White Paper on the Federal Land Development Authority (Felda) will be tabled in the Dewan Rakyat next Wednesday, Deputy Economic Affairs Minister Dr Mohd Radzi Md Jidin said.

2 April 2019 – The High Court will hear the case of former Felda chairman Tan Sri Mohd Isa Abdul Samad, who is facing one count of criminal breach of trust (CBT) and nine counts of corruption, involving more than RM3 million.

The followed a decision by High Court judge Mohamed Zaini Mazlan in allowing the application by Mohd Isa to transfer the case from the Sessions Court to the High Court after the prosecution did not object to it.

9 Feb 2019 – MARA Chairman discusses company revamp with the aim of again uplifting the Bumiputera

4 April 2019 – Cabinet is discussing TH restructuring and recovery plan.

11 Feb 2019 – MARA subsidiaries are being consolidated under GLIC Mara Corp after the change of federal government. After the MARA Inc. scandal, leaders stated that “due diligence processes” were completed and issues resolved, stating the intention to continue the development of a “complete ecosystem in Mara’s commercial entities” to uplift the Bumiputera economy.

10 Dec 2018Lembaga Tabung Haji (TH) has been illegally paying dividends (hibah) to its depositors since 2014, says Datuk Seri Dr Mujahid Yusof Rawa.

The Minister in charge of Islamic affairs explained that the dividend payments had contravened the Tabung Haji Act 1995 as TH had more debts than assets in the previous years.

24 May 2018 –  State fund 1Malaysia Development Berhad (1MDB) is insolvent and unable to repay its debts, two of the company’s directors have told the Finance Ministry.