1Malaysia Development Berhad(1MDB) Case

Analysis
Presented by :
Alden Lim
Daneille Chong
Kan Jun Jian
Stephanie Lee
Kevin Tham
1MDB, what is it ?
http://1mdb.com.my/
1Malaysia Development
Berhad founded in 2009,
wholly owned by Malaysian
Government to develop
Malaysia in a long-run.
Forging global partnerships
Foreign direct investment
1MDB milestone

Sept 2009 Announced the setting up of a

USD2.5billion venture with PetroSaudi
International Limited.

Jan 2010 Signed a co-operation framework

agreement with State Grid of China(SGCC) hoping
they would become major investors in Sarawak
Corridor of Renewable Energy(SCORE).
Jan 2010 Signed a co-operation agreement with Abu Dhabi
Future Energy Company(Masdar) in hope to build Malaysias
first carbon-neutral city.

May 2010 Being part in union of companies, jointly

undertake project to redevelop Sungai Besi old international
airport (now:TUDM) partnering with Qatar Investment
Authority(QIA) where QIA proposed to invest USD5billion.

May 2010 Partnering with Mubadala Development Company

to develop Tun Razak Exchange(TRX) project that launched in
2012.
1MDB
Beginning of 2010, critics raised and controversies on the
lack of transparency given to 1MDBs accounts.

Fourth quarter of 2010, 1MDB explained that they had

their accounts audited and signed by KPMG meanwhile
Deloitte and Ernst & Young was involved too.
1MDB
2013, 1MDB asked for a 6 months extension on annual report.

Same year, change of 3 auditors since 2009 seems suspicious

to the public.

To justify their debt in 2015, they inked an agreement along

with Iskandar Waterfront Holdings and China Railway
Engineering Corporation to sell 60% of its stake in Bandar
Malaysia Sdn Bhd.
1MDB
Global investigators believe more than $1billion entered
Malaysian PMs personal account - although denied.

2017, Malaysia is reported to pay Abu Dhabi $1.2 Billion to

settle 1MDBs debt.

Investigation goes on finding also involved in this case is

actor Leonardo DiCaprio and mode Miranda Kerr.
 WHISTLE BLOWING & WHISTLEBLOWER

When a former on the existing employee of the organization

raise his voice against the unethical activities being carried
out within the organization.
Fraud, corruption, violation of company rules and policies.
The person who raise his voice.
 The Whistleblower Protection Act 2010
Provides protection to whistleblowers who voluntarily come forward to report
or reveal information on corruption activities.

Encourages the public from all sectors to disclose corruption related activities.
This act is to give protection to the whistleblower in the form of
confidentiality information, immunity from civil and criminal action and
protection from detrimental action being taken against them.

Created for combat the corruption and other wrong doings.

 LIMIT OF THE WHISTLEBLOWER
The whistleblower protection under the WPA 2010 may be revoked
by the enforcement agency in six circumstances under s.11(1) WPA
2010 as follows:
1. The whistleblower himself has participated in the improper
conduct disclosed.
2. The whistleblower willfully made in his disclosure of improper
conduct a material statement which he knew or believed to be
false or did not believe it to be true.
3. The disclosure of improper conduct is frivolous or vexatious.
 LIMIT OF THE WHISTLEBLOWER

4. The disclosure of improper conduct principally involves questioning

the merits of government policy, including policy of a public body.
5. The disclosure of improper conduct is made solely or substantially
with the motive of avoiding dismissal or
other disciplinary action.
6. The whistleblower, in the course of making the disclosure or providing
further information commits an offence under the WPA 2010.
 BENEFIT OF WHISTLEBLOWER

Section 15 (1) WPA 2010

provides that upon a request by the whistleblower that
reprisal actions have been taken against him or at any
time he fears that detrimental action would be taken
against him, the enforcement agency may on his behalf,
seek damages, injunction or any other relief as the court
deems fit.
 Clare Rewcastle Brown
Sarawak-born Clare Rewcastle Brown is an investigative journalist
who founded the Sarawak Report and Radio Free Sarawak in 2010.
Clare Rewcastle Brown is the whistleblower in the case of 1MDB.
She had published a bombshell of a report: the personal bank
accounts of Malaysian Prime Minister Najib Razak, she alleged, held
nearly $700 million tied to state fund 1Malaysia Development
Berhad (1MDB).
She is under Metropolitan Police protection in London.
Utilitarianism Theory
Actions should be measured in terms of the happiness, or pleasure, that they produce.

We should act always so as to produce the greatest good for the greatest number.

Choose the action that would produce the most overall happiness for the group, even
though it produced less happiness for you than other alternatives would have.

Act Utilitarianism- Choose the action that produces the greatest good for the greatest
number.

Rule Utilitarianism- We ought to live by rules that, are likely to lead to the greatest good
for the greatest number.
Utilitarianism Theory on 1MDB
1MDBs objective was initially good, to drive strategic initiatives for long-term economic
development for the country. Malaysian citizens as a whole would be able to enjoy
economic growth. As Utilitarianism encourages producing the greatest good for the
greatest number.
However, instead of promoting economic growth for the well-being of the citizens. 1MDB
funds were used to fuel the greed of a few individuals (Jho Low, Riza Aziz, MO1) in order
to purchase luxuries such as luxury hotels in Beverly Hills, paying gambling debts,
partying with Hollywood celebrities, jewelry, and RM2.6 billion into personal the
personal account of MO1.
The scandals happenings were opposed to the Utilitarianism theory, which is to produce
the greatest good for the greatest number. Instead, Malaysias sovereign funds were
misappropriated to fulfil the greed of a few individuals, at the expense of the Malaysian
citizens.
Instead of promoting economic growth, 1MDB has instead hurt the Malaysian economy.
Contributing to the fall of the Malaysian Ringgit, cuts in government expenses and the
implementation of GST in order to foot the RM42 Billion debt it has caused.
Kantian Theory Introduction

Immanuel Kant came up with theory Kantianism which states that

individuals should always do the right thing no matter what.
Act rationally and always tell the truth no matter what.
Businesses should never be devious, which includes actions like
stealing, lying, and other unethical activities.
Duty is explained through the categorical imperative which states that
our "maxims"(rule or principle on which you act) should be applied as
a law to live which means it basically impacts everyone positively.
Kantian Theory on 1MDB

1MDB did not express any Kantian values with how it handled its
economic dealings, leading to debts amounting to RM42 billion
(USD11.73).
It has misappropriated vast amounts of money leading to no positive
outcome for the government or the citizens of Malaysia and has
broken the categorical imperative of Kants theory that deliberate
misrepresentation is always wrong.
The humanistic dimension of Kant prohibits businesses to treat
humans as a means to an end, 1MDB was supposed to promote
economic growth but has instead acted on the greed of several
individuals with little to no benefits for the Malaysian people.
Justification

1MDB did not adhere to Rawls theory of justice in which social and
economic inequalities are justified only if the benefit the least
advantaged members of society. Instead it has only benefitted a few
people without any redistribution of wealth to the citizens.
It also did not aim to solve the economic inequalities that it was
originally created to reduce and has instead damaged Malaysias
attractiveness towards investors.
1MDBs actions and practices were unjustifiable as it should have
made ethical business decisions and prevented mounting debts from
occurring.
Thank you!