1Malaysia Development Berhad
Encyclopedia
1Malaysia Development Berhad (1MDB) is a strategic development company, wholly owned by the Government of Malaysia. 1MDB was established to drive strategic initiatives for long-term economic development for the country by forging global partnerships and promoting foreign direct investment
.
aimed at ensuring economic development for the state of Terengganu
that is long term and sustainable while safeguarding the economic well-being of the people of Terengganu.
TIA was established on February 27, 2009, and was later renamed 1Malaysia Development Berhad. In his announcement on July 22, 2009, Prime Minister Najib Razak said the decision to expand TIA into a federal entity was made to enable its benefits to reach a broad spectrum of Malaysians rather than to the residents of only one state.
TIA was officially renamed 1Malaysia Development Berhad on September 25, 2009.
, tourism
and agribusiness
.
On September 30, 2009, 1MDB and its strategic partner PetroSaudi International Limited announced the setting up of a US$2.5 billion joint venture company, aimed at spearheading the flow of foreign direct investment from the Middle East
into Malaysia.
Following that, on January 11, 2010, 1MDB signed a cooperation framework agreement with the State Grid Corporation of China (SGCC), with the intention to undertake various energy-based projects in the Sarawak Corridor of Renewable Energy
(SCORE) and subsequently become major investors in SCORE.
On January 18, 2010, 1MDB signed a cooperation agreement with Abu Dhabi Future Energy Company
(also known as Masdar) to explore clean technology projects and investments, including the possibility of building Malaysia’s first carbon-neutral city.
On May 13, 2010, 1MDB as part of a consortium of companies, will jointly undertake a multi-billion-ringgit redevelopment project on the Sungai Besi
old international airport, which is now the base for the Royal Malaysian Air Force. The site covers 162 hectares and is planned to be developed into an Islamic financial centre and will include Qatar Investment Authority
(QIA) as a partner. This project is dubbed the City of Malaysia. About the same time, 1MDB and QIA had signed an MOU
to assess the viability of energy and real estate investments. In the MOU, QIA also proposed to invest US$5bil.
On May 21, 2010, it was reported that 1MDB will jointly develop the Kuala Lumpur International Financial District
project at a currently vacant piece of land covering 34.4 hectares in the city of Kuala Lumpur with Mubadala Development Company
. Nevertheless, the groundbreaking ceremony which was supposed to be held on May 29, 2010, was called off and postponed indefinitely at the last minute. During his speech on 10th Malaysia Plan, Najib Razak identified the KLIFD and City of Malaysia projects as two of many public-private partnership
projects which will help drive the nation's transformation agenda.
and a senior management team. The Board of Advisors is chaired by the Prime Minister of Malaysia, Najib Razak.
development project barely a year after its establishment has drawn criticisms from the opposition. Opposition leader and Member of Parliament for Permatang Pauh
, Anwar Ibrahim
, has openly questioned the credentials of the company. He told Parliament that according to the records held by the companies commission, 1MDB "has no business address and no appointed auditor." He further questioned the Prime Minister's interest in the approval given to 1MDB on this matter. 1MDB's profit figures for the year ended 31 March 2010, totalling 425 million ringgit, have also been challenged by Member of Parliament for Petaling Jaya Utara, Tony Pua
, who questioned whether the figures may have been a result of hefty asset injection into 1MDB by the government, such as the transfer of land rights to the company.
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
.
History
1MDB began as Terengganu Investment Authority (TIA), a sovereign wealth fundSovereign wealth fund
A sovereign wealth fund is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. Sovereign wealth funds invest globally. Some of them have grabbed attention making bad investments in several Wall Street financial...
aimed at ensuring economic development for the state of Terengganu
Terengganu
Terengganu is a sultanate and constitutive state of federal Malaysia. The state is also known by its Arabic honorific, Darul Iman...
that is long term and sustainable while safeguarding the economic well-being of the people of Terengganu.
TIA was established on February 27, 2009, and was later renamed 1Malaysia Development Berhad. In his announcement on July 22, 2009, Prime Minister Najib Razak said the decision to expand TIA into a federal entity was made to enable its benefits to reach a broad spectrum of Malaysians rather than to the residents of only one state.
TIA was officially renamed 1Malaysia Development Berhad on September 25, 2009.
Focus
1MDB focuses on strategic development projects in the areas of energy, real estateReal estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
, tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
and agribusiness
Agribusiness
In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....
.
On September 30, 2009, 1MDB and its strategic partner PetroSaudi International Limited announced the setting up of a US$2.5 billion joint venture company, aimed at spearheading the flow of foreign direct investment from the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
into Malaysia.
Following that, on January 11, 2010, 1MDB signed a cooperation framework agreement with the State Grid Corporation of China (SGCC), with the intention to undertake various energy-based projects in the Sarawak Corridor of Renewable Energy
Sarawak Corridor of Renewable Energy
The Sarawak Corridor of Renewable Energy or SCORE is a new development corridor in central Sarawak state, Malaysia. SCORE was launched on 11 February 2008. It is one of the five regional development corridors being developed throughout the country...
(SCORE) and subsequently become major investors in SCORE.
On January 18, 2010, 1MDB signed a cooperation agreement with Abu Dhabi Future Energy Company
Abu Dhabi Future Energy Company
The Abu Dhabi Future Energy Company is an Abu Dhabi-based renewable energy company that develops sustainable low-carbon energy projects. It is wholly owned subsidiary of Mubadala Development Company.-Operations:...
(also known as Masdar) to explore clean technology projects and investments, including the possibility of building Malaysia’s first carbon-neutral city.
On May 13, 2010, 1MDB as part of a consortium of companies, will jointly undertake a multi-billion-ringgit redevelopment project on the Sungai Besi
Sungai Besi
Sungai Besi is a township in the Federal Territory of Kuala Lumpur. The deepest tin mine in Malaysia is located here. Sungai Besi was a historical mining town with many heavy industries such as steelworks, waste steel plants and other steel industries...
old international airport, which is now the base for the Royal Malaysian Air Force. The site covers 162 hectares and is planned to be developed into an Islamic financial centre and will include Qatar Investment Authority
Qatar Investment Authority
The Qatar Investment Authority is Qatar's sovereign wealth fund, specializing in domestic and foreign investment. It was founded in 2005 to manage the oil and natural gas surpluses by the Government of Qatar...
(QIA) as a partner. This project is dubbed the City of Malaysia. About the same time, 1MDB and QIA had signed an MOU
MOU
MOU, MoU, Mou or mou may refer to:* Memorandum of understanding* Minutes of Use, in telecommunication operations* Ministry of Unification, a branch of the South Korean government.* The Museum of Osaka University...
to assess the viability of energy and real estate investments. In the MOU, QIA also proposed to invest US$5bil.
On May 21, 2010, it was reported that 1MDB will jointly develop the Kuala Lumpur International Financial District
Kuala Lumpur International Financial District
The Kuala Lumpur International Financial District is a proposed joint property development comprising office towers for finance and banking, residences and retail spaces between 1Malaysia Development Berhad and the Mubadala Development Company on a plot of land covering 34.4 hectares near Jalan...
project at a currently vacant piece of land covering 34.4 hectares in the city of Kuala Lumpur with Mubadala Development Company
Mubadala Development Company
Mubadala Development Company PJSC was established in October 2002 as a Public Joint Stock Company and is a wholly owned investment vehicle of the Government of Abu Dhabi, in the United Arab Emirates....
. Nevertheless, the groundbreaking ceremony which was supposed to be held on May 29, 2010, was called off and postponed indefinitely at the last minute. During his speech on 10th Malaysia Plan, Najib Razak identified the KLIFD and City of Malaysia projects as two of many public-private partnership
Public-private partnership
Public–private partnership describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies...
projects which will help drive the nation's transformation agenda.
Corporate governance
1MDB is professionally managed and has a triple-tier check-and-balance system comprising a Board of Advisors, a Board of DirectorsBoard of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
and a senior management team. The Board of Advisors is chaired by the Prime Minister of Malaysia, Najib Razak.
Controversy
The involvement of 1MDB in the multi-billion ringgit Kuala Lumpur International Financial DistrictKuala Lumpur International Financial District
The Kuala Lumpur International Financial District is a proposed joint property development comprising office towers for finance and banking, residences and retail spaces between 1Malaysia Development Berhad and the Mubadala Development Company on a plot of land covering 34.4 hectares near Jalan...
development project barely a year after its establishment has drawn criticisms from the opposition. Opposition leader and Member of Parliament for Permatang Pauh
Permatang Pauh
Permatang Pauh is a town in Seberang Perai, the hinterland portion of the island-state of Penang, Malaysia. Permatang Pauh is now led by Anwar Ibrahim who is the Member of Parliament for Permatang Pauh....
, Anwar Ibrahim
Anwar Ibrahim
Anwar bin Ibrahim is a Malaysian politician who served as Malaysian Deputy Prime Minister from 1993 to 1998. Early in his career, Anwar was a close ally of Prime Minister Mahathir bin Mohamad but subsequently emerged as the most prominent critic of Mahathir's government.In 1999, he was sentenced...
, has openly questioned the credentials of the company. He told Parliament that according to the records held by the companies commission, 1MDB "has no business address and no appointed auditor." He further questioned the Prime Minister's interest in the approval given to 1MDB on this matter. 1MDB's profit figures for the year ended 31 March 2010, totalling 425 million ringgit, have also been challenged by Member of Parliament for Petaling Jaya Utara, Tony Pua
Tony Pua
Tony Pua Kiam Wee is a Malaysian politician, currently the Member of Parliament for Petaling Jaya Utara. Pua was the former Malaysian CEO of Cyber Village Sdn Bhd, a SESDAQ -listed company...
, who questioned whether the figures may have been a result of hefty asset injection into 1MDB by the government, such as the transfer of land rights to the company.