Malaysia central bank warned government in 2014 of 1MDB risks

Business Mirror PH / Bloomberg | .

Malaysia’s central bank warned the government as early as 2014 of risks to the financial system from debt-ridden state investment company 1Malaysia Development Bhd. (1MDB), Governor Zeti Akhtar Aziz said.

Bank Negara Malaysia issued two memorandums to the finance ministry, the sole shareholder of 1MDB, flagging the dangers of the fund’s mounting debt, Zeti said in an interview in Washington on Saturday. She didn’t say how the ministry responded.

“Of course, this was on our radar screens,” Zeti said of 1MDB, whose debt ballooned to 50 billion ringgit ($12.8 billion) as of January. “We were monitoring in terms of the level of their indebtedness, and whether they had any systemic implications on the banking sector.”

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