By P. Gunasegaram
Tiger is normally not easily surprised and he was even more unsurprised when he heard that our self-styled strategic development company 1Malaysia Development Bhd has obtained a six-month extension to report its accounts. Are their explanations justified? Tiger thinks not.
Why are we not surprised that 1Malaysia Development Bhd (1MDB) serially delayed its accounts yet again by six months? Well, because it is what it has done in the past two years at least. Any reasonable person, who is suspicious of serial offenders cannot be blamed for thinking that there must be something wrong.
This would be especially so given 1MDB’s long trail of misdeeds, much of which has been uncovered over the last three years following persistent reporting by different media publications, including us.
Despite the voluminous communications to the media since Arul Kanda took over in January as president and executive director, many of the key questions demanded of 1MDB were pointedly evaded and have largely gone unanswered till today.
Arul Kanda
Regarding the latest delay, Arul Kanda told The Edge that in addition to 1MDB, two of the subsidiaries under 1MDB, Edra Global Energy and 1MDB Real Estate Sdn Bhd, are seeking for a one-month extension to file their respective annual audited accounts.
What was the reason for the delay this time, which makes it three times in a row at least for parent 1MDB?
Arul had attributed the cause of delay to the company not being in control of key documents, as the relevant documents were claimed to have been seized in a raid of its KL offices by police on July 8.
Claiming that its auditor Deloitte required original sets of documents to finalise the accounts of 1MDB, which were no longer in its possession after the raids, Arul was quoted as saying that the delay in submission couldn’t be helped.
However, on June 10, Deloitte Malaysia told the Public Accounts Committee (PAC) that it has yet to receive orders from 1MDB to audit its latest accounts. That was before the investigation. So why was that?
While Arul said Deloitte needs original documents, can’t they be given access to the documents first and then work from copies after that? Surely the investigating authorities are not going to deny 1MDB’s requests in this respect which would delay submission of their accounts to the Companies Commission of Malaysia in accordance with the law.
In fact, any investigating authority should welcome an audit of 1MDB as it would throw further light on the controversial accounts and may help to explain the convoluted money trail that has been a feature of 1MDB’s numerous questionable dealings. Auditors who are familiar with 1MDB may be much better placed than the authorities in bringing to light and explaining many questionable practices.
When investigations first begun a special task force comprising Bank Negara Malaysia, the attorney-general, the inspector general of police and the Malaysian Anti-Corruption Commission was set up on July 8 to investigate 1MDB.
Muhyiddin Yassin
But a month later on Aug 5, following revelations of a RM2.6 billion political “donation” into the accounts of the prime minister, former attorney-general Abdul Gani Patail, who was heading the investigations, was replaced by Mohamed Apandi Ali. On the same day, there was a cabinet reshuffle which saw Muhyiddin Yassin removed as deputy prime minister, while Shafie Apdal was removed as minister.
Arul said that original documents are no longer in 1MDB’s possession following the raid on the company but did not mention explicitly whether investigations are ongoing and which departments are investigating 1MDB.
However, considering that the audit procedure for 1MDB had not even started on June 10, more than two months after the financial year-end on March 31, 2015, as revealed to the PAC by Deloitte itself, it would be reasonable to assume that 1MDB had other problems besides lack of original documents. It would be illuminating to know what these problems are.
If that July 8 raid had not taken place, would Deloitte have been able to complete its audit on time? If we were to assume that they had not commenced by then, which is reasonable because they don’t seem to have cited the original documents by then, probably not as they would have had just three months.
Recall that 1MDB had previously cited that its complexity resulted in extra time needed for the audits to be completed – as long as a year. Considering that 1MDB had become far more complicated since the last reported accounts for the year ended March 31, 2014, it would be highly unlikely the audit would have been completed by then.
One thing seems to be crystal clear – 1MDB and the government, which owns it wholly through the Minister of Finance Inc, have been repeatedly buying time to clear its accounts. And that can mean only one thing as previous account delays have amply demonstrated – trouble, big trouble.
GRRRRR!!!
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