1MDB disavows audited accounts, naming new auditors

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The 1MDB statement on its audited accounts and auditors today.

In another twist to the financial-political saga in Malaysia, scandal-hit state investor 1MDB today said its audited accounts for 2013 and 2014 can “no longer be relied on” after the civil suit filed by the US Department of Justice.

1MDB has also said that it will replace its auditors Deloitte, which had signalled its intention to resign five months ago on February 26, the third such audit firm to quit the company since its inception in 2008.

But Deloitte will continue to audit is subsidiaries.

 

The 1MDB’s statement is reproduced in full below:

On 20 July 2016, the Office of the Attorney General of the United States of America announced that the Department of Justice filed a civil forfeiture complaint against certain entities and individuals and contemporaneously filed related actions seeking the civil forfeiture of certain assets held in the names of these parties (“Complaint”).

The Board of Directors of 1MDB has reviewed and deliberated the contents of the Complaint. 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, pending final and conclusive determination by a court of law of certain alleged facts, as described in the Complaint.

The Board takes this opportunity to highlight it is committed to finding a new auditor for 1MDB, to replace Deloitte, which has previously notified 1MDB of its intention to resign on 26 February 2016. Until a new auditor is appointed, Deloitte will remain as auditor on record. The Board appreciates the professionalism displayed by Deloitte to date and highlights that Deloitte will continue to audit key subsidiaries of 1MDB, including but not limited to: TRX City Sdn. Bhd. (formerly known as 1MDB Real Estate Sdn. Bhd.), Bandar Malaysia Sdn. Bhd. and Edra Bhd.

1MDB, a unit of the Ministry of Finance Inc (MoF) is now a run-off company that will be held until it pays off its debt. There is no word if its staff will be retrenched or absorbed by the Ministry, which is headed by Prime Minister Najib Razak.

As mentioned before, Najib Razak has been identified as Malaysian Official 1 in the DoJ documents in all but name.

 

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