Malaysia's central bank has closed its investigations into scandal-ridden 1Malaysia Development Berhad. Bank Negara last month issued a "letter of administrative compound" to the fund and said that the payment of the compound will mark the conclusion of its investigations.

On the face of it, it would seem that the matter has been resolved. Former governor Zeti Akhtar Aziz had promised to use her remaining days in office to sort out the outstanding issue before handing over the reins to her successor Muhammad Ibrahim on 1 May.

The central bank, in a brief statement dated 28 April said that after receiving the green light from the Attorney General, it had issued a letter of administrative compound to 1MDB for failing to "fully comply with directions issued under the Financial Services Act 2013."

This covered the order to 1MDB to repatriate monies remitted abroad following the revocations of the three permissions granted by the central bank to the state fund in 2009, 2010 and 2011. In addition, Bank Negara accused the fund of failing to submit evidence and documentation specified by the bank to justify its inability to fully comply with the repatriation order.

Bank Negara governor
Malaysia\'s former Bank Negara governor Zeti Akhtar Aziz promised to resolve outstanding 1MDB issue before handing over reins to successor. REUTERS/Olivia Harris

1MDB has until 30 May to pay the fine. The statement did not reveal amount of the fine imposed and whether the fund still had to repatriate the funds in question or whether this has already taken place. When contacted by the Edge Financial Daily, the central bank's spokesman declined to reveal the fine amount, saying that it was confidential.

The newspaper said that from 2009 to 2011, the state fund had transferred out a total of $1.83bn in three tranches for various ventures with Petrosaudi International Ltd. The newspaper had in previous reports claimed that the monies were allegedly diverted into bank accounts and for purposes "other than what 1MDB had submitted" and approved by Bank Negara.

It also claimed that the use of the money sent overseas "for purposes that were not what had been approved" was behind the reason why Bank Negara wanted criminal proceedings to be taken against the state fund. However the Attorney General refused and the newspaper believes that the "compound fine" appears to be "a compromise between the two authorities."

In a separate statement issued on the same day, the state fund said that it "respects the authority and the decision" of the central bank. It gave the assurance that the compound will be paid "on or before the due date." Last year, when the central bank revoked its permissions to invest overseas and ordered the fund to repatriate the sums involved, 1MDB said that it had already spent or earmarked the amount for debt-settlement arrangements.

The Wall Street Journal last year reported that hundreds of millions of dollars from 1MDB had allegedly gone into the personal accounts of Malaysian Prime Minister Najib Razak through a complex web of intermediaries, Najib was the chair of 1MDB's advisory board and is also the Finance Minister of Malaysia.

Both 1MDB and Najib have denied any wrong doing. In fact, Malaysia's attorney general in January cleared Najib, claiming that the $681m that had gone into his account in 2013 was a legal political donation from the Saudi royal family and that most of it had been returned.

The state fund is under investigations in several jurisdictions over alleged money-laundering and bribery allegations. So far Singapore is the only country to charge a private banker Yeo Jiawei for corruption. The case is still pending.