I had in my question to the Finance Minister on 18 October 2016 asked whether the accounts of 1MDB will be re-audited after Deloitte Malaysia has withdrawn their endorsement for the 1MDB Financial Statements for the year ending March 2013 and 2014.
The response from the Minister of Finance, Dato’ Seri Najib Razak was that the Board of Directors of 1MDB are convinced that there were no wrong doings committed by 1MDB and the 1MDB Financial Statements which were previously audited are true and transparent in accordance to the state of affairs of the company at the relevant points of time.
“Lembaga Pengarah 1MDB yakin bahawa tiada kesalahan telah dilakukan oleh 1MDB dan Penyata Kewangan 1MDB yang telah diaudit sebelum ini adalah benar dan telus mengikut hal ehwal syarikat pada masa tersebut.”
The answer provided by Dato’ Seri Najib Razak was completely against the Companies Act which requires the annual submission of financial statements endorsed by an appointed external auditor to the Registrar of Companies. Directors who fail to ensure that the above are duly completed in a timely matter may be punishable by up to 5 years’ jail or thirty thousand ringgit.
Therefore, the question of whether the “Directors of 1MDB are convinced” or otherwise on the veracity of the accounts which have been disowned by Deloitte is irrelevant. The law requires the accounts for the relevant financial periods to be endorsed by the Company’s appointed auditors and submitted to the Registrar of Companies.
Furthermore, after the Directors have been severely castigated and censured by the Auditor-General and the Public Accounts Committee (PAC) for the complete failure to properly control both the company’s management and its activities which have resulted in multi-billion ringgit of losses, these Directors’ conviction on the disowned financial statements have no standing or credibility. After all, the then Directors of 1MDB have accepted their culpability in the entire scandal by tendering their resignations collectively after the damning report by the PAC.
What’s more, even the current Second Finance Minister, Dato’ Seri Abdul Johari Ghani is at best unclear, at worse clueless over what took place in 1MDB over 2012-2014. I had asked the Minister yesterday, as to why did 1MDB take a US$3.5 billion loan with a guarantee by Abu Dhabi’s IPIC but chose to pay a total of US$2.517 billion of “collateral and top-up security deposits” and US$993 million of compensation to the purported IPIC subsidiary, Aabar Investment PJS Limited?
After all, if 1MDB could pay a total of US$3.51 billion to the British Virgin Island registered Aabar, why would they need to take a US$3.5 billion loan with an IPIC guarantee – which as of today, we still owe the bondholders US$3.5 billion to be paid by 2022?
The failure of the Second Finance Minister to answer the questions yesterday proved that there is an urgent need for the Government to appoint auditors to re-audit the accounts which have been disowned by Deloitte Malaysia. This is so that the truth can be discovered and Malaysians can find out what really took place in 1MDB. The scandal has caused not only the biggest bailout to be taking place in Malaysia, but also for making Malaysia the most infamous kleptocracy in the world.
If 1MDB refuses to appoint a special auditor to re-audit the accounts of 1MDB from the Financial Year ending March 2013, then it only confirms what all Malaysians today suspect to be true – that Dato’ Seri Najib Razak and the BN government is adamant on covering up the single largest act of corruption, misappropriation and abuse of power in the history of Malaysia which has caused the loss of at least US$5.6 billion.