Before there is a company called 1 Malaysia Development Berhad (1MDB) been made viral by the media, there is an authority called Terengganu Investment Authority (TIA). The TIA which was setup with a starting fund of RM10bil in the late 2008 was been made as a sovereign wealth fund aimed at the state of Terengganu’s economic development. The authority that had appointed Tunku Mizan as the chairman for the TIA’s board of advisers will work alongside with Terengganu Menteri Besar (First Minister) in managing the oil royalty payments from the Federal Government to the state.
The TIA was an idea that had been proposed by the Yang di-Pertuan Agong at that time namely Tunku Mizan Zainal Abidin as a way to gain some of the oil royalty into the sovereign wealth fund that would be supervised by foreign bankers and investors, and operated by a team of professionals. In addition, the authority had been given a mandate to invest globally in bonds to ensure that the financial of the state reached sustainability on a long-term basis as well as safeguarding the economic for the people of the state when oil and gas resources were depleted.
However, the TIA had been renamed as 1MDB on January 2009. The decision on expanding the TIA into a federal entity was made so it could help in giving the benefits to bigger and wider residents in Malaysia rather than one state said by the Prime Minister of Malaysia Najib Razak in his announcements on July 22, 2009.
1 Malaysia Development Berhad
1 Malaysia Development Berhad (1MDB) which is wholly owned by the Government of Malaysia has become a strategic development company in the early 2009. The establishment of the private limited company is made to drive strategic initiatives into the country in a long-term economic development projects in the areas of tourism, real estate, energy and agribusiness by forging global partnerships and promoting foreign direct investment. Some of the high-profile projects involving 1MDB includes the acquisition of three Independent Towers Producers, Tun Razak Exchange (TRX), and TRX’s sister project called Bandar Malaysia.
Corporate Governance of 1MDB
The 1MDB has at least three tiers in the check-and-balance system that comprises a senior management team, a Board of Advisors, and a Board of Directors. The Prime Minister of Malaysia, Najib Razak had become the chairman for the 1MDB’s Board of Advisors, where he had ordered the Malaysian Auditor General to make an audit of 1MDB in early March 2015 as the public slowly deceive the financial management made by 1MDB.