Nov 18 decision on judicial review against Securities Commission over fine imposed on Deloitte PLT

  • Nation
  • Monday, 26 Oct 2020

KUALA LUMPUR: The High Court here has fixed Nov 18 for decision in a judicial review brought by audit firm Deloitte PLT against the Securities Commission’s (SC) decision to fine the company RM2.2mil for breaching the Capital Markets and Services Act 2007 in the issue of bonds linked to 1Malaysia Development Bhd (1MDB).

Datuk Malik Imtiaz Sarwar, who is acting for Deloitte, confirmed the matter when contacted by the press here on Monday (Oct 26).

The matter was initially fixed for decision today before Justice Mariana Yahya but it was vacated due to the conditional movement control order (MCO).

On Jan 30 last year, the SC reprimanded and imposed a RM2.2mil fine as penalty on Deloitte for four breaches, which it had described as “serious in nature”, relating to the RM2.4bil Sukuk Murabahah Programme issued by Bandar Malaysia Sdn Bhd (BMSB) in 2014.

Deloitte was the statutory auditor for BMSB and 1MDB Real Estate Sdn Bhd (1MDB RE) for their financial years ended March 31,2015 to 2016.

1MDB RE, now known as TRX City Sdn Bhd, was one of the third party security providers of the Sukuk Murabahah Programme and the immediate holding company of BMSB.

1MDB is the holding company of 1MDB RE and BMSB.

In a statement by the SC, it said Deloitte was found to have committed two breaches under Section 276(3)(b) of the Capital Markets and Services Act 2007 (CMSA) for failure to immediately report to the SC irregularities which may have a material effect on the ability of BMSB to fulfil its obligations in repaying sukuk holders any amount under the Sukuk Murabahah Programme.

On Nov 14,2019, Deloitte then filed a judicial review against the SC’s decision to impose the fine.

On Nov 25,2019, Justice Mariana granted leave to Deloitte to commence its judicial review application.

A news portal reported that Deloitte said the move breached the rules of natural justice and that the charges framed in the SC’s show cause letter were vague and ambiguous.

It also said it had paid the RM2.2mil fine last year but that this was done without prejudice to its right to commence judicial review against the SC’s ruling.

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