The Malaysian government is making preparations to shut down the state-owned 1MDB fund, the state investment firm that has become the centre of a scandal involving politicians, socialites and banks.
The remaining assets of the fund, which includes plots of land in Penang Island and prime areas of Kuala Lumpur, will be moved to two companies owned by the country’s finance ministry, according to Singapore-based «The Straits Times».
In an effort to alleviate its substantial debt late last year 1MDB disposed of another of its main assets, power plants owned by Edra Energy, the energy arm of 1MDB, to a Chinese firm, China General Nuclear Power Corporation, for close to $4 billion.
Another Auditor
Last week U.K.-based Parker Randall became the fourth auditor appointed by 1MDB after Ernst & Young, KPMG and Deloitte Touche Tohmatsu. The appointment came almost a year after Deloitte had informed the state-owned fund that it planned to resign.
However, in order to gain approval for the closure plan, the Malaysian government must guarantee 1MDB's creditors and holders of billions of dollars in bonds that it will honor all obligations.
More Fallout to Come
While Bank Negara Malaysia (BNM) has concluded its investigation into the activities of the scandal hit unit, the authorities in Switzerland, Singapore and the U.S. are still working through offenses conducted in their jurisdictions directly allied with the fund.
In the latest developments connected to the fund, Jens Sturzenegger, the former branch manager of Falcon Private Bank in Singapore, was charged with 16 offenses pertaining to 1MDB. Sturzenegger became the fifth person to be charged in the extensive probe.
