1MDB’s RM13.4bil assets had been tested and at fair value

KUALA LUMPUR: The inquiry by the bipartisan Public Accounts Committee (PAC) to the auditors of 1 Malaysia Development Bhd (1MDB) has revealed that RM13.4bil of 1MDB’s assets had been independently verified as of its financial year ended March 31, 2014 (FY14).

“Deloitte told us that they have seen the bank statements pertaining to the RM13.4bil of assets in BSI Bank. They can verify the value of the assets in question as they did a test on whether the assets were at fair value at that point in time for FY14,” PAC chairman Datuk Nur Jazlan said at a press conference after the inquiry.

“As of March 31, 2014, Deloitte said they had gotten independent valuation of these assets of RM13.4bil and the valuations tallied. Deloitte had not done any work for FY15, as they only did it up to March 31, 2014,” PAC member Tony Pua, who was also present, said.

“The question of whether some of the assets were in units or cash, which has been the subject of debate ... has not been audited yet for this year,” Pua added.

The PAC also said the Finance Ministry had not yet requested an audit of 1MDB for the FY15. 

Nur Jazlan added: “Deloitte told us that they have not been instructed to start auditing for FY15 yet. A government-linked company should practise prompt auditing of their accounts. At least two to three months after the closing of the accounts on March 31, for FY15.” 

Deloitte also stood by their earlier declaration that there was “no going concern” of 1MDB’s accounts for FY14.

PAC said in a statement that it wanted to know the steps Deloitte had taken to verify 1MDB’s accounts as “true and fair” when Deloitte gave an “unqualified” opinion on the 1MDB’s statements.

The PAC also wanted to know what were Deloitte’s responsibilities when it audited 1MDB’s accounts after taking over from KPMG.

“We wanted to know from Deloitte whether 1MDB relied on the government guarantee to go on as a ‘going concern’, to continue to operate as a ‘sovereign fund’, because this matter was not stated in the audit report,” Nur Jazlan said.

Nur Jazlan noted that it may have to call Deloitte in again to verify its testimony after the PAC got more information following hearings with more witnesses.

Deloitte was repesented by its country managing partner Tan Theng Hooi, partners Ng Yee Hong, Cheong Thoong Farn and Mark Thomson, and its senior manager Edwin Tan.

“We feel that this is a blessing in disguise for us as the session has revealed a lot of information for us to proceed with the next steps in the inquiry. We will call 1MDB president Arul Kanda Kandasamy and former president Datuk Shahrul Azral Ibrahim Halmi to face the PAC on the first week of August,” he said.

“We will allow them to celebrate Hari Raya first and after that, there will be no more excuses for them. Both of them will have to face the PAC,” Nur Jazlan added.

Nur Jazlan said that it was important for PAC to “build up the case” with the background information obtained from the auditors and the management of 1MDB before proceeding to decide on the next steps.

“For example, if Bank Negara’s report is of value to us, we can call them at a later stage of this inquiry. We have to call in the four main witnesses first,” he said.

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