1Malaysia Development Berhad (1MDB) and its subsidiaries have demonstrated recalcitrance in failing to submitted their yearly financial statements to the Companies Commission of Malaysia on a timely basis.
1MDB for example, finally submitted its accounts for the financial year ended 31 March 2014 last week on 5th November, more than a month after the statutory deadline of 30 September or 6 months after closing. In 2013, 1MDB submitted its accounts after a 7-month delay and a questionable move to change its auditors from Ernst & Young to Deloitte Malaysia.
Unfortunately, despite the 1MDB submission last week, it is not yet the end of the story. A check yesterday with the CCM revealed that key subsidiaries of 1MDB has not filed their financial statements.
1MDB Energy (Langat) Sdn Bhd, which is a key subsidiary forming part of the twice postponed on-going exercise to publicly list 1MDB’s energy assets has not filed its financial statements since 21st September 2012 for the March 2012 accounts. This is despite the company having at least RM2.8 billion ringgit in loans with collaterals charged to Affin Investment Bank Bhd.
Similarly, 1MDB Real Estate last filed its accounts on 28th December 2012 for the financial year ending March 2012. Like 1MDB Energy, the real estate arm is also heavily in debt. The last known debt amount was RM5.9 billion with collaterals pledged to Ambank and AmInvestment Bank Bhd.
On 8 October 2014, the Prime Minister in his reply to my query has promised the House that the accounts for these companies would be submitted by the end of October 2014. However it is nearly mid-November today, and yet the financial statements are nowhere to be seen, despite being late by more than 24 months.
However, these 2 companies are not the only culprit in 1MDB’s large family of subsidiaries. Another key energy subsidiary, Powertek Investment Holdings Bhd has also not filed accounts since March 2012.
Further checks revealed that Farlim Properties Sdn Bhd, Gerak Indera Sdn Bhd and Jimah Energy Ventures Sdn Bhd last submitted their accounts for December 2012, and are already more than 4 months late in submitting their December 2013 accounts.
Other companies inspected – 1MDB Hotels & Resorts Sdn Bhd, 1MDB Energy Holdings Sdn Bhd, 1MDB Synergy Sdn Bhd, Bandar Malaysia Sdn Bhd, Mastika Lagenda Sdn Bhd and Powertek Bhd have not submitted their accounts since March 2013. These are just companies which I have bothered to pay RM15 each to CCM to verify, and not the full extensive list of 1MDB subsidiaries.
The sheer lack of governance, transparency and accountability from the wholly-owned government corporation where the Prime Minister himself chairs the Board of Advisors is shocking and disgraceful. Such scandalous behaviour certainly serves as a terrible example to all other government agencies. It is hence barely surprising that the Auditor-General Reports consistently highlights the wastages, negligence, abuse of power and even corruption in government departments and companies.
Therefore we call upon 1MDB must immediately file the accounts of all the subsidiaries which have yet to do so immediately since the parent’s group accounts have already been submitted. There is absolutely no reason for these subsidiary accounts to be further delayed unless the 1MDB has something to hide.