Decision on Deloitte’s judicial review against SC set for Nov 18

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

Lawyer Datuk Malik Imtiaz Sarwar, who is acting for Deloitte, confirmed the matter when contacted yesterday.

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

On Jan 30, last year, the SC reprimanded and imposed a RM2.2mil fine as penalty on Deloitte for four breaches of a “serious 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 ending on March 31,2015, and March 31,2016.

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 firm of 1MDB RE and BMSB.

In a press 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. Eleven days after, Justice Mariana granted leave to Deloitte to commence its judicial review application.

Deloitte reportedly said the move breached the rules of natural justice and that the charges 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.