1mdb Government Investment Company History

History 1MDB

1MDB is a government investment company which named 1 Malaysia Development Bhd. that started in 2009 lead by our former prime minister, Mr. Najib Razak. 1MDB built up around $12 billion in debt Terengganu Investment Authority (TIA) in 2009. On the same year, Saudi Arabian company which is Petro Saudi invests $1 billion with 1MDB to develop energy projects. According to minutes of 1MDB board meetings, the board members of 1MDB very confuse because only $300 million was transferred to Petro Saudi’s account while the remaining $700 million was sent to a different account. After that, 1MDB books $200 million profit that converts equity stake in the joint venture to loans. It also invests another $800 million to Petro Saudi. In 2010, the auditor Ernst & Young of 1MDB was fired after it questions the profits earned by Petro Saudi. On September 2012, 1MDB sells stake for $2.32 billion in Petro Saudi joint venture and puts into Brazen Sky Ltd. which is a unit of 1MDB that invests in a Cayman Islands fund. Goldman Sachs sells two bonds which costs $1.75 billion each for 1MDB to fund power plant purchases.  The bonds were guaranteed by Abu Dhabi’s IPIC. The financial statements 1MDB show the $1.4 billion in fund made collateral payment to IPIC for its bond guarantee, unfortunately it show no record. Then, 1MDB spends RM 2.3 billion on power generation business from Malaysia conglomerate Genting Group. Genting financial statements show gaining of RM1.9 billion on sale and 1MDB record value of power plants to RM500 million. On January 2013, Mr. Najib and Goldman Sachs executives had a meeting in Davos, Switzerland about raising money for new project with Abu Dhabi investment fund.

A businessman known as Low Taek Jho diverted money from 1MDB into personal accounts. Some of the money is ended up with Mr. Najib and his family. This scandal involves at least seven countries, around a dozen companies and investment funds and several key people. Mr. Najib also stated Genting donates RM31 million to Yayasan Rakyat 1 Malaysia Foundation but Genting do not have response on that. According to the Wall Street Journal reports, Malaysian investigators had found around $700 million in Mr. Najib’s accounts via banks, companies and agencies linked to 1MDB. The money came from an unidentified donor in the Middle East and missing after investigation.  Mr. Najib denies wrongdoing and he do not take the money for own use. Macc saying that the money was a legal donation from Saudi Arabia's royal family but Saudi official was denied it. Mr. Najib was losing in a general election in May 2018 and ended 61 years of rule of his party. Malaysian people charged Mr. Najib with criminal breach of trust involving in 1MDB. Police found out more than RM1.1 billion, jewellery, designer bags and luxury items which is connected to 1MDB.

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