1MDB chairman Tan Sri Lodin Wok Kamaruddin and the other board members of the state-owned entity are likely to resign in July or August. – The Malaysian Insider pic
In a move to mitigate the mounting criticism against debt-laden 1Malaysia Development Bhd (1MDB), the board of directors of the strategic investment fund will be made to step down as early as July, said sources with knowledge of the matter.
The sources said there could be changes in 1MDB’s board as well as its advisory committee. “This will happen in July or August,” they told The Edge Financial Daily.
Another source said not only the board of directors, but 1MDB’s advisory board would also step down en bloc. Prime Minister Datuk Seri Najib Razak is the chairman of the advisory board.
1MDB’s board of directors included chairman Tan Sri Lodin Wok Kamaruddin, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail, Tan Sri Ong Gim Huat and Ashvin J. Valiram.
Lodin Wok is also the group managing director and deputy chairman of Boustead Holdings Bhd and a non-executive director at Affin Hwang Capital. Shahrol Azral is the president of Malaysia Petroleum Resources Corp (MPRC) and Ismee Ismail is the managing director of Lembaga Tabung Haji.
The proposed move comes at a time when various investigations are being carried out by authorities such as the Malaysian Anti-Corruption Commission (MACC), police, auditor-general, Public Accounts Committee and Bank Negara Malaysia into 1MDB over possible misconduct in its operations since 2009.
According to the source, the removal of the existing board was a prelude to wind down the strategic investment fund, which has chalked up RM42 billion in debts in less than five years.
On May 29, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that the Finance Ministry’s wholly owned unit 1MDB would spin off the Tun Razak Exchange (TRX) and Bandar Malaysia into stand-alone companies, as part of its rationalisation plan to be implemented in full by early next year.
Ahmad Husni also revealed that while options are being pursued with respect to the monetisation of Edra Energy Global Bhd, the ministry remained a key shareholder in the TRX and Bandar Malaysia.
Currently, 1MDB’s power assets are housed under Edra Energy, with an enterprise value of RM16 billion to RM18 billion. It is looking for suitors, and to date five corporations have expressed interest.
Last Friday, Bloomberg reported that Acwa Power International, a Saudi power developer, and San Miguel Corp were among parties that had expressed interest in 1MDB’s energy assets.
In addition, Singapore’s government-linked Sembcorp Industries Ltd is in preliminary discussions with 1MDB, while IJM Corp Bhd and Tenaga Nasional Bhd have both indicated their interest in these power assets as well. – The Edge Financial Daily