KUALA LUMPUR, June 13 Malaysia's government has
submitted a bill to parliament that would create an investment
panel inside the country's tax revenue agency which could invest
in a wide range of areas, including initial public offerings of
The bill, scheduled for debate in parliament next week, has
drawn stiff criticism from opposition politicians, who said it
would allow the government to channel taxpayers' money into
potentially risky investments.
The proposed investment panel comes as controversy dogs
sovereign investment fund 1Malaysia Development Berhad (1MDB),
chaired by Malaysia's Prime Minister and Finance Minister Najib
Razak, which is struggling under $11 billion in debt.
Under the proposed amendment to the Inland Revenue Board
Act, the new panel would be made up of seven appointees,
including the central bank governor, a finance ministry
representative, and a chief executive officer. The chairman of
the panel and at least three other members would be chosen by
The panel can invest in stocks, corporate bonds, and in
IPOs, and is entitled to establish companies to engage in "any
scheme or enterprise" planned by the Board, according to a copy
of the bill seen by Reuters.
"This bill will not involve the government in any extra
financial expenditure," the bill says.
Legislation proposed by the government is usually approved
by parliament, where the long-ruling National Front coalition
has a working majority. An official at the Prime Minister's
Office said he could not immediately respond to questions about
Wong Chen, an opposition member of parliament, told Reuters
the proposed panel lacked accountability and had no limit on the
amount of funds it could invest.
"Why are they hijacking money meant for public services?
There's no limit how much the panel can take from the IRB to be
used for investments."
The government could use the panel to support the planned
IPO this year of 1MDB's power assets, Wong said. The market
debut, worth up to $2 billion, is seen as crucial to 1MDB's
fortunes, but has been delayed and is only expected to go ahead
late this year.
Critics have questioned 1MDB's investment choices, the size
of its debt, $2.25 billion parked in a Cayman Island fund,
hundreds of millions of dollars paid to Goldman Sachs for
handling bond issues, delays in its accounts, changes of
auditors, and a perceived lack of transparency.
(Reporting by Trinna Leong; Editing by Stuart Grudgings and