By P Prem Kumar/ Pic By TMR

The government has learned lessons from the controversial strategic investment arm 1Malaysia Development Bhd (1MDB), says Prime Minister Datuk Seri Mohd Najib Razak.

Speaking to over 1,000 attendees of the Invest Malaysia 2018 conference, Najib said the government admits of failings and lapses of governance in 1MDB, which was established in 2009.

“Now, I am not going to brush over this issue. There were indeed failings at the company, there were lapses of governance. There was a valid cause for concern,” he said.

Najib, who is also Finance Minister, said the valid concern prompted the government to conduct one of the most comprehensive and detailed investigations in Malaysia’s corporate history via multiple lawful authorities, including the Parliament’s Public Accounts Committee (PAC).

“But just as we have learned lessons there, so we have learned lessons from past mistakes,” he pointed out.

1MDB was incorporated in 2009, after Najib took over the premiership of the country, by transforming a Terengganu state fund into a federal agency.

1MDB was reliant on debt (bank loans, bonds and sukuk) as company capitals, where portions of the debt was government guaranteed or received support letters from the government.

The debt commenced at RM5 billion in 2009 and rose to RM42 billion, against assets worth RM51 billion as of financial year ended March 31, 2014. During the period, 1MDB paid RM2.4 billion to service interest on the debt.

1MDB’s debt level reached RM50 billion in January 2016, in contrast to the RM53 billion in assets. 1MDB spent RM3.3 billion for payment of interest on the debts between April 1, 2014 to March 31, 2015.

It has since liquidated assets and paid off a significant portion of total debt.