Malaysia’s central bank said Thursday it has completed an investigation into debt-laden 1Malaysia Development Bhd, or 1MDB, and submitted a report recommending “appropriate enforcement action” to the country’s chief prosecutor. The troubles faced by state investment fund 1MDB, which has racked up more than $11 billion in borrowings while facing a cash crunch, have in part weighed on the country’s fiscal health because of a government guarantee on some of its debts, and on Malaysia’s ringgit, which recently slumped to a 17-year low.
The company, whose advisory board is chaired by Prime Minister Najib Razak, is also being probed by other authorities including the anticorruption agency and police. “The bank has submitted its investigation papers to the attorney general with the recommendation for the appropriate enforcement action,” Bank Negara Malaysia Gov. Zeti Akhtar Aziz said during a briefing on the country’s second-quarter gross domestic product data. The report was submitted to the attorney-general this week, she said. Ms. Zeti declined to elaborate, citing laws that prevented her from publicly discussing the bank’s investigation. In June, the bank said it had launched a formal inquiry to examine 1MDB’s activities.