KUALA LUMPUR, March 23 — The country’s central bank will take “administrative action” against 1Malaysia Development Berhad (1MDB) for failing to support its reasons for not moving US$1.83 billion (RM7.76 billion) from abroad back to Malaysia, Tan Sri Zeti Akhtar Aziz said today.
Bank Negara Malaysia (BNM) Governor Zeti said 1MDB has missed a deadline to produce documents to back up its purported need to keep the funds overseas to repay the state-owned firm’s foreign debts.
“At this stage we have not received documentary evidence and within a certain timeline that has been stipulated to them, as we assess that they have not fully complied with the bank’s direction, the bank is pursuing appropriate administrative enforcement action as allowed by laws under which the bank operates, and the bank has commenced the due process under the law,” she told reporters here.
Zeti also said 1MDB has not provided any reason on why it was not able to provide the documentary evidence.
She added that the central bank’s action on 1MDB is purely administrative and could possibly result in penalties or compounds, stressing that it is different from the criminal enforcement action that the Attorney-General (AG) had decided not to pursue.
She said the bank will go through the due process and submit its recommendation for administrative action to the AG, whose decision will be final.
“So Bank Negara has not yet submitted this and it plans to submit it during the remaining part of my term in office, that submission will be made and that outcome will be known,” said the 68-year-old who took office in 2000 and whose term expires next month.
She explained that the main reason BNM was pursuing administrative action against 1MDB was to “uphold the integrity of the functioning of our financial system”.
That meant ensuring all companies “regardless of who their shareholders are” comply with existing rules and regulations, she said.
Zeti confirmed this is the final action that BNM will be pursuing on 1MDB, reiterating that she wants closure on this matter to allow the next central bank governor to start with a “clean slate”.
Last year, BNM ordered 1MDB to repatriate funds amounting to US$1.83 billion (RM7.76 billion), following the central bank’s revocation of three permits to the state fund under the Exchange Control Act 1953 (ECA) for investments abroad.
1MDB had in return indicated that it was unable to repatriate the money as demanded as the funds had either been spent or earmarked for debt transfer.
Last November 13, Zeti said BNM was seeking additional information from 1MDB to validate the firm’s claim.
She also said that it is incumbent on companies to provide updates on their overseas investments at BNM’s request, especially when dealing with large amounts that exceed RM100 million.
EDITOR’S NOTE: An earlier version erroneously mentioned the Cayman Islands when the BNM governor did not. Malay Mail Online apologises for the mistake, which has since been corrected in this copy.