Not unusual for 1MDB to operate in secrecy, says Azmi Hassan

Transparency could hurt sovereign fund’s business dealings, says Azmi Hassan. Free Malaysia Today reports:

azmi-hasanSHAH ALAM: It is not unusual for state-owned investment funds to operate under a veil of secrecy, said a university professor yesterday at a forum on 1MDB here.

“There are about 50-60 companies like 1MDB in the world and over 90 per cent of their operations are done backstage,” said Universiti Teknologi Malaysia (UTM) associate professor Azmi Hassan.

Azmi, one of the panellists at the “Apa Di Sebalik 1MDB” forum, said 1MDB should not divulge details of all its business affairs as this would expose the firm’s investment strategies to rivals.

Other panelists at the forum were Pandan MP and PKR secretary-general Rafizi Ramli and Johor Umno Youth deputy chief Khairul Anwar Rahmat.

Controversy is swirling around 1MDB, a brainchild of Prime Minister Najib Razak, which is reportedly RM42 billion in debt while repeatedly failing to pay off interests on its debts on time.

The sovereign fund is now under investigation by the Auditor-General’s Department and Parliament’s Public Accounts Committee is expected to look into it as well.

“There are two issues here, which are difficult to prioritise… to give importance to the strategy of the country’s (investment) administration or transparency,” Azmi was quoted in a report carried by The Malay Mail Online.

“As a geo-strategist, to me, while transparency should be upheld, not everything can be revealed 100 per cent.”

“This is not a chronic or unusual situation… it is present in many countries, in fact.”

Azmi said that while the public deserved to know details about 1MDB, they must understand that there were many issues relating to strategy that simply could not be revealed.

The successful Norwegian pension fund, which is financed by the country’s oil wealth, is known for its transparency but not all can follow how it operates, said Azmi.

The federal government, he said, should restructure 1MDB or even dispose of its assets if necessary to streamline it.

Rafizi, however, called for extreme measures: “We have to stop 1MDB and shut it down.”

The “damage” done by 1MDB is too great, he said, and it has forced the government to provide a standby credit line of RM950 million in taxpayer funds, on top of the billions that it is liable for if the firm defaults.

Rafizi also said the RM950 million standby credit facility goes against Deputy Prime Minister Muhyiddin Yassin’s recent statement that the government would not bail out 1MDB until an audit was completed.