Understanding 1MDB issue

I am trying to understanding it by finding answers to my own stupid questions. Here goes..

1. What is its entity? Is it established under any Act ?

Answer : From 1MDB website : It's a public company (indicated by its name 1Malaysia Development Berhad ) with address at Level 8, Menara IMC, Jalan Sultan Ismail 50250 KL.

2. Who are the directors ?

2A. Who are the owners ?

3. What is a sovereign wealth fund ? Is 1MDB a sovereign wealth fund ?

From Wikipedia

A sovereign wealth fund (SWF) is a state-owned investment fund investing in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank.

Some sovereign wealth funds may be held by a central bank, which accumulates the funds in the course of its management of a nation's banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings that are invested by various entities for the purposes of investment return, and that may not have a significant role in fiscal management.

The accumulated funds may have their origin in, or may represent, foreign currency deposits, gold, special drawing rights (SDRs) and International Monetary Fund (IMF) reserve positions held by central banks and monetary authorities, along with other national assets such as pension investments, oil funds, or other industrial and financial holdings. These are assets of the sovereign nations that are typically held in domestic and different reserve currencies (such as the dollar, euro, pound, and yen). Such investment management entities may be set up as official investment companies, state pension funds, or sovereign oil funds, among others.

There have been attempts to distinguish funds held by sovereign entities from foreign-exchange reserves held by central banks. Sovereign wealth funds can be characterized as maximizing long-term return, with foreign exchange reserves serving short-term "currency stabilization", and liquidity management. Many central banks in recent years possess reserves massively in excess of needs for liquidity or foreign exchange management. Moreover it is widely believed most have diversified hugely into assets other than short-term, highly liquid monetary ones, though almost no data is publicly available to back up this assertion. Some central banks have even begun buying equities, or derivatives of differing ilk (even if fairly safe ones, like overnight interest rate swaps

Is 1MDB a sovereign wealth fund ??? 1MDB website denies that it is one.

From its blog's first post ever since 2010

"For our first post, we thought it would be helpful to respond to a question that is raised frequently and concerns the very nature of our business: What exactly is 1MDB?

From time to time, we see people describing 1MDB as a sovereign wealth fund. However, the fact of the matter is that we are a strategic development company. In practice, this translates into a company that is independently run and funded, but one whose investment decisions are driven by the interests of the national economy.

Whilst a sovereign wealth fund and a strategic development company may not sound very different, there is an important distinction between the two:  whereas a sovereign wealth fund is directly funded by the government and invest on its behalf, we raise and invest our own capital. In fact, we have only ever received RM1 million in equity provided by the government at the time of our inception.

As a company that is wholly owned by the Ministry of Finance, we are able to combine the practical support of the Government with private sector expertise and capital to unlock potential value. As a result, we have a unique ability to clear log-jams, unlock value, and drive forward projects.

At present, we are focused on two sectors: energy and real estate.

Our energy business comprises a portfolio of 15 power and desalination plants in five countries, with a net power generation capacity of 5594MW, making us the second largest independent power producer in Malaysia. Our focus on this sector stems from the Government’s strategic aim of ensuring Malaysia’s energy security, with sustainable provision of power seen as being critical to maintaining investor confidence and supporting the economic growth of the country.

On the real estate side, we are responsible for a number of transformational projects in Malaysia. This includes TRX - which will be Kuala Lumpur’s first dedicated financial district upon completion, and Bandar Malaysia - a new 495 acre mixed-use urban development on the site of the old airport in Sungai Besi that we envisage will serve as a benchmark for sustainable communities in the region.  

Through our focus on these two key sectors, we aim to contribute towards and drive the sustainable long-term economic development and growth of Malaysia. "

4.  Why government can enter into business ??? What principle of government allows this ???

To be continued soon..