Finance Minister Lim Guan Eng asserted that more financial scandals in the vein of 1Malaysia Development Bhd (1MDB) remain locked up in “red files” that were previously restricted to only a select few former officials at his ministry. Federal authorities are still working on the “red files” in their investigations into scandals involving the previous Barisan Nasional administration and have revealed more shocking information about contracts that have put the government at a disadvantage as stated by the Finance Minister Lim Guan Eng.
The finance minister also said the process was ongoing and investigations were moving. “We have to give the audit firms and internal auditors time to investigate in detail. They will try their best and work as fast as possible. We want them to look into things in detail. There is no time frame set for them,” he said in Penang today. In an interview with Sinar Harian today, the finance minister also said these contracts had unusual clauses that were not favourable to the government. “There were several contracts where payments were made even though work had only been completed 10 to 15 percent. But nearly two-thirds of the contract value or total of the contracts had been paid,” he was reported as saying. “We are investigating these contracts that are pretty unusual.”
“Normally when a job is 30 percent complete, we would only pay 30 percent. But this has not been adhered to. The job is 30 percent complete, but they have paid 70 percent. Why? Because the contracts were made based on periodic payments, that is (for example), a payment every six months, regardless of whether work has been done or not,” he said. However, he did not reveal what the contracts were for, or who the contractors were. Finance Minister lamented since the contracts have already been signed, there is little the government can do about the deals themselves, but they will probe those behind the decisions. “We will investigate and ask why they have drawn such contracts that are not in the country’s best interests. That is what we need to investigate,” he told Sinar.
Lim was granted access to the secret files after he was sworn in as finance minister, and immediately discovered Finance Ministry had paid RM7 billion of 1MDB’s debts and interest payments last year alone, which illustrates the magnitude of the loss of the people’s money due to 1MDB’s debts. “Actually the debts of 1MDB before this was paid by the government. Before this, 1MDB said they paid it themselves. They have never paid a single sen of their debts,” he told local daily Sinar Harian in an interview.
In a separate interview with local business weekly The Edge, Lim said the Auditor-General had told him on his first day as finance minister that the government’s accounts could not be consolidated due to lack of access to all the files. When speaking about the hidden “red files”, Lim expressed belief that it started when the 1MDB scandal emerged during former prime minister Datuk Seri Najib Razak’s rule. He also ventured that the practice likely did not exist during Najib’s predecessor’s time. “Pak Lah (Tun Abdullah Ahmad Badawi) is a straight guy, he wouldn’t hide anything. He would just leave it to the professionals. But 1MDB is a different ball game completely. I think there was a deliberate effort to shield the public from this information,” he was quoted saying by The Edge. Lim confirmed that all the secret files have now been shared with him and the Auditor-General, but pointed out that the latter had previously been barred from accessing the files despite the department’s auspices.
The newly elected Finance Minister confirmed that all the secret files have now been shared with him and the Auditor-General, but pointed out that the latter had previously been barred from accessing the files despite the department’s auspices. Lim said only the “key people” who were directed by the former Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah and one of his deputies could in the past access the red files, adding that they were not to be shared with any other department then. “So the person directly in charge of the (red files), he got all the written authorisation, so you cannot blame him. He was instructed to carry out his duties. “So the person who instructed was, of course, Tan Sri Mohd Irwan (who has been relieved of his duties),” he said in the excerpt of his interview that was published by The Edge. Lim said the red files included information on 1MDB and former subsidiary SRC International, adding that he will disclose the other red files next week.
He also said the discovery that MoF and other government agencies had been paying off 1MDB debts proved that the state investment firm’s executives had not been forthright about its ability to repay its loans. However, he reiterated that 1MDB was effectively insolvent.