Embattled 1Malaysia Development Berhad (1MDB) has decided that its 2013 and 2014 audited financial statements should be disregarded, pending a court decision on the civil lawsuit filed by the United States last week to recover more than US$1 billion (S$1.36 billion) in American assets bought with money allegedly misappropriated from the state investment firm.
“Whilst the Board remains confident that no wrongdoing has been committed by 1MDB and that the past audited financial statements continue to show a true and fair view of the company’s affairs at the relevant points in time, the Board has decided that, as a precautionary measure, the 2013 and 2014 audited financial statements of 1MDB should no longer be relied on by any party,” 1MDB said in a statement on Tuesday (July 26).
1MDB’s 2013 and 2014 financial statements were signed off by its auditor, international audit firm Deloitte.
Last Wednesday, the US Justice Department (DOJ) filed a civil lawsuit to seize the assets it said were tied to money stolen from 1MDB, overseen by Malaysian Prime Minister Najib Razak.
Hidden in the US in real estate, art and other luxury goods, the DOJ said the money was embezzled from the fund and moved around the world using secretive shell companies that masked its trail.
The Singapore authorities have also said they seized bank accounts and properties worth S$240 million in a probe on possible money laundering linked to the state investment fund.
Mr Najib had said Malaysia takes good governance seriously and will fully cooperate with investigators. He had also maintained that it would be unfair to pass judgment on the individuals identified in the lawsuit — including his stepson Riza Aziz, a Hollywood producer of films, including The Wolf Of Wall Street as well as financier Mr Jho Low, who is a longtime friend of Mr Aziz and his family— simply for being named in the filing.
1MDB, which was founded by Mr Najib in 2009 shortly after he came to office, has accumulated debts of RM50 billion (S$16.7 billion) as of January this year, as opposed to its assets of RM53 billion. It is being investigated in at least six countries, including Switzerland and Singapore, over allegations it was used to funnel money to politically connected individuals. Both Mr Najib and 1MDB have denied any wrongdoing.
Mr Najib has been under intense political pressure over RM2.6 billion deposited into his private accounts, as well as irregularities in 1MDB.
Malaysia’s attorney-general has cleared Mr Najib of wrongdoing, saying that the money in his bank accounts was a political donation from the Saudi royal family. Despite the controversy, Mr Najib has consolidated his political power, removing officials from the governing party who have criticised him.
Some outspoken activists who used social media to question his conduct also face criminal charges.
1MDB also said on Tuesday that it is committed to finding a new auditor to replace Deloitte, after the latter had notified the firm of its intention to resign on Feb 26 this year.
“Until a new auditor is appointed, Deloitte will remain as auditor on record,” it said.
Expressing its appreciation of the professionalism displayed by Deloitte to date, 1MDB said the auditor will continue to audit the company’s key subsidiaries, including its real estate and energy arms such as TRX City, Bandar Malaysia and Edra.
Source: TODAY Online
