Bnm to further assess 1mdb’s investments once all information gained — Zeti

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KUALA LUMPUR: Bank Negara Malaysia (BNM) will further assess 1Malaysia Development Bhd’s offshore investments once all requested information is gained and validated, says Tan Sri Dr Zeti Akhtar Aziz.

In addition, the governor noted that the conclusion of the company’s rationalisation plan, expected by year-end, should be taken into account as well, adding that any assessment made prior to that is considered premature.

“So, BNM is now evaluating 1MDB’s response to this administrative order, and 1MDB of course has publicly stated that the funds for the redemption of these offshore investments have been utilised and are also earmarked for a debt-for-asset swap as part of their rationalisation plan.

“So the bank is validating this now… and will take into account any firm, binding commitments made by the 1MDB under its plan which would contribute towards reducing its debt burden,” she told a press conference after announcing the nation’s third quarter Gross Domestic Product (GDP) data at Bank Negara here today.

Zeti was responding to a question on when the central bank would continue its probe on the failure of 1MDB to repatriate US$1.83 billion from its offshore investments.

Last month, the central bank issued a directive under the Financial Services Act 2013 to the sovereign wealth fund to repatriate the fund.

In the same statement, Bank Negara said it had also revoked permissions granted earlier to 1MDB under the Exchange Control Act 1953 for the offshore investments.

Zeti said the bank’s decision to revoke those permissions were based on its findings that the permissions obtained by 1MDB were based on inaccurate or incomplete disclosure of the relevant material information.

She also noted that the bank had actually rejected the company’s application last year to get more funds for offshore investments, citing the company’s failure to comply with the bank’s rules and regulations.

“In 2014, there was a rejection of their application, and therefore, if any corporation does not comply with our rules and regulations or does not submit complete information, then subsequent requests to invest abroad will be rejected.

“Rules and regulations in the financial system serve a purpose, and this has served the purpose of the country for more than 50 years now, that we have a very sound, effective financial system,” she said.

Zeti noted that any investor making offshore investments should always provide details of their respective transactions and the status of the investments as stated under the bank’s rules and regulations.

“Other investors should be aware that if they want to invest massively abroad above the threshold of RM100 million, they have to submit not only the forms, but detailed information on the investments.

“And BNM will continually request for the information and if information is not provided, then future applications will be rejected, and in the case of 1MDB, I do believe that subsequently, their request was indeed rejected,” she said. — Bernama