KPMG has failed Malaysians, says DAP
Published: 22 March 2015 8:34 AM
Whistleblower site Sarawak Report says auditor KPMG cooked the books when auditing strategic investor 1Malaysia Development Berhad (1MDB). – The Malaysian Insider file pic, March 21, 2015.Global auditor KPMG has failed Malaysians, says DAP after the latest expose by whistleblower site Sarawak Report which published documents allegedly showing that the firm cooked the books when auditing 1Malaysia Development Berhad (1MDB).
Its national publicity secretary, Tony Pua, said Sarawak Report provided the strongest evidence that KPMG was "complicit" in covering up the joint venture between the debt-ridden strategic investor and PetroSaudi Holdings in the former's March 2010 financial statements.
He said it was peculiar as KPMG on its website said it was a place where auditors prided themselves to act with "integrity" and strived to uphold the “highest professional standards, provide sound advice and rigorously maintain our independence”.
“But in this case KPMG has clearly failed to act with any integrity in this audit exercise and did not act with the necessary independence.
“Because they help 1MDB cover up the shocking embezzlement in the 1MDB PetroSaudi JV, 1MDB was allowed to continue its wanton acts by lending even more cash to PetroSaudi.
“Consequently, 1MDB accumulated a monster RM42 billion in debt over the next four years. Clearly, KPMG has failed Malaysians," he said in a statement today.
KPMG was 1MDB's auditor between 2010 and 2012, and had signed off the company's financial statement ending March 31, 2010, on October 4 the same year.
In its website, Sarawak Report had said yesterday that evidence showed "unacceptable and unethical practices", which included actively conspiring to back date documents referred to in the audit report, as well as intervening to retrospectively alter agreements which had been previously signed by 1MDB.
Pua who is one of 1MDB's staunchest critics cited an email dated May 22, 2010 between 1MDB's Chief Investment Officer Nik Kamil and PetroSaudi CEO Patrick Mahoney on relevant transaction documents, which was published on Sarawak Report.
The email allegedly states: “3. Letter of Agreement to purchase shares – all okay, except Auditors want a change a change in clause 5.9. Conceptually, they say that they will only clear the audit if the ‘proportionate reduce [sic] in guarantee’ is satisfied by either a ‘proportionate conversion of the shares’ or payment in ‘cash’. Attached is the draft which they had proposed which I have not sent to our lawyers as it is better that you deal with it.”
The Sarawak Report expose, he added, revealed details which points towards a highly elaborate scam to siphon money from 1MDB.
1MDB has long been in the spotlight but scrutiny heightened after a series of reports by Sarawak Report, which said that Malaysian businessman Low Taek Jho or Jho Low had orchestrated the 2009 joint venture between 1MDB and PetroSaudi International to allegedly siphon off US$700 million (RM2.5 billion) from the strategic investor.
Since then, Prime Minister Datuk Seri Najib Razak has ordered the Auditor-General to look at 1MDB’s books, saying that the A-G report would be passed for inspection to the Public Accounts Committee (PAC), which is fully bipartisan and reflects the Parliament’s composition.
Prior to Najib’s order, PAC said it wanted the national auditor to carry out an audit of 1MDB's deals before it called up the company. – March 22, 2015
