PAC investigations on hold after members are appointed to Cabinet

KUALA LUMPUR — The Malaysian Parliament’s Public Accounts Committee’s (PAC) investigation into the scandal-ridden 1Malaysia Development Bhd (1MDB) will be temporarily suspended, after four of its members were appointed to the Cabinet following today’s (July 28) reshuffle, said the committee’s chairman.

Mr Nur Jazlan Mohamed told the Malay Mail Online that he is stepping down as PAC chairman after being named by Prime Minister Najib Razak as the new Deputy Home Minister.

Mr Nur Jazlan added that the other Members of Parliament (MP) from the ruling Barisan Nasional (BN) who will be joining the Cabinet must also vacate their positions in the PAC. The MPs are Mr Reezal Merican Naina Merican as Deputy Foreign Affairs Minister, Ms Mas Ermieyati Samsudin as Tourism and Culture Deputy Minister, and Mr Wilfred Madius Tangau as Science, Technology and Innovation Minister.

“I have to step down. All (of us who were appointed) have to step down,” said Mr Nur Jazlan, who is known for his outspoken ways.

He also confirmed that this meant that the ongoing PAC probe into 1MDB would be affected.

“It would have to be temporarily halted. We will have to wait until the next Parliament sitting to decide on the new PAC chief to be appointed, so this means PAC investigations will be halted until then,” he added.

Before the appointments, the PAC had scheduled Aug 4 and 5 to question 1MDB chief executive Arul Kanda Kandasamy and his predecessor, Mr Shahrul Ibrahim Halmi, as part of its investigation into the state-owned firm’s dealings.

The PAC will also recall 1MDB’s then-auditors Deloitte, KPMG and Ernst & Young, along with several other 1MDB executives and directors of the company’s subsidiaries for further questioning in September to answer for the discrepancies raised by the Auditor-General’s interim report on the firm.

Before today’s changes, the bipartisan PAC had 13 members, comprising eight MPs from the ruling BN coalition and five lawmakers from the opposition bench.

By parliamentary convention, MPs appointed to the government administration cannot be sitting members of the PAC.

The PAC decided in a special meeting held on April 30 to begin investigation proceedings into 1MDB.

It had previously said that it would wait for the Auditor-General’s report before beginning its probe. But Mr Nur Jazlan later said the PAC could no longer wait for the report, as there was too much public speculation over the investment firm’s financial standing.

The Auditor-General submitted a preliminary report to the PAC on July 10, and is expected to release a full report by the end of the year. 

A special government task force is also investigating allegations made by The Wall Street Journal in a report that said US$700 million (S$957 million) linked to 1MDB were funnelled into Prime Minister Najib Razak’s personal accounts.

The strategic fund has come under public scrutiny mainly because of its whopping RM42 billion (S$15.1 billion) debt racked up in the past five years.

1MDB has not been able to generate enough earnings to service its debts. 

This raised public concerns over some of its debt papers issued with the government’s letter of support, meaning the government is responsible for the fund’s debt repayment, should it default.

Consequently, the investment fund is currently stepping up efforts to hive off its assets, namely power generation plants and land, so as to ease its tight cash flow. AGENCIES