KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) had declined an invitation to participate in Invest Malaysia Kuala Lumpur 2015 and its absence is a huge letdown as most of investors’ negative perceptions of Malaysia stem from the debt-laden strategic development company, said CIMB Group Holdings Bhd chairman Datuk Seri Nazir Razak.

“1MDB is not a systemic issue, [but] I don’t think it is helpful that 1MDB is not here,” Nazir told reporters on the sidelines of the two-day investor conference co-organised by Bursa Malaysia Bhd and CIMB Investment Bank Bhd.

“I don’t know [the reason]. [It] declined to participate and I’m disappointed because [it] would have been an important element of Invest Malaysia, given the backchatter on the topic,” he said, adding that “a lot” of the issues about corporate governance and transparency brought up by investors at Malaysia’s recent hugely successful US$1.5 billion [RM5.44 billion] sukuk issuance “derived from the whole negative news about 1MDB”.

“It is an isolated case but unfortunately, it is a bit of an eyesore. The earlier we solve it, the better [it is for Malaysia] because when issues are not cleared up, people tend to expect the worst,” said Nazir.

Citing how investors had “warmed up” to Malaysia after a strong investment case was presented at the sukuk roadshow, Nazir called on Malaysian companies to engage investors “more aggressively” to allay their concerns.

He said the “excessive” negative news has distracted investors from the country’s fundamentals, and this has significantly impacted the ringgit, investor sentiment as well as the performance of the local stock market.

Closing at 3.6235 to the US dollar yesterday, the ringgit is down 9.87% the past year and is the third-worst performing of Bloomberg’s basket of Asian currencies after the yen and  rupiah that have weakened 14.59% and 10.22% over the same period respectively.

It did not help that Invest Malaysia kicked off yesterday on the back of yet another exposé by whistleblower site Sarawak Report, which said it received “disturbing evidence” showing BSI Bank in Singapore dismissing documents supplied by 1MDB pertaining to its subsidiary Brazen Sky Ltd’s statement of accounts.

This raised fresh concerns about the true value of IMDB assets. In his blog post on chedet.cc yesterday, former prime minister Tun Dr Mahathir Mohamad also called 1MDB “not a sovereign wealth but sovereign debt” fund.

“Today and tomorrow is also about getting [investors’] feedback ... Hopefully, Malaysia will get more aggressive in explaining and dealing with those issues because you cannot just spin, you’ve got to deal with the substance of the questions,” said Nazir.

The country, he added, has successfully dealt with tough issues, for example the controversial “cross” protest at a church in Taman Medan that the police are investigating for potential violations under the Sedition Act on the prime minister’s orders.

“I’m glad the prime minister stepped in and made a decisive intervention. That’s the kind of way that some of these issues can be resolved,” said Nazir.

Referring to 1MDB’s absence at Invest Malaysia, Nazir also

said there are “other forums” for it to present its case. “I hope [it] will.”

This article first appeared in The Edge Financial Daily, on April 24, 2015.