Nazir Razak questions delay of 1MDB annual audit
PETALING JAYA: The delay of an audit for Government investment arm 1Malaysia Development Berhad’s (1MDB) financial year which ended in March this year is “perplexing” to CIMB chairman Nazir Tun Razak (pic).
“I am perplexed why your March 2015 audit has not even started? How is this allowed? Has standards of GLC governance dropped so low?” Nazir said in an Instagram post on Thursday night, accompanied by a graphic with the 1MDB logo.
On June 10, Public Accounts Committee (PAC) chairman Datuk Nur Jazlan Mohamed revealed that 1MDB’s financial year accounts, which ended in March this year, had yet to be audited.
Nazir, who is also the younger brother of Prime Minister Datuk Seri Najib Tun Razak, has been critical of 1MDB in the past, and had criticised 1MDB’s president and group executive director Arul Kanda Kandasamy as well as former CEO Datuk Shahrol Azral Ibrahim Halmi for not attending a PAC inquiry.
In fact, Nazir Razak may not only criticising Arul Kanda, he could also be criticising the Prime Minister cum-Finance Minister slash Advisor of 1MDB for not giving the green light for Deloitte to start auditing 1MDB. It was reported yesterday:
The PAC found out at yesterday’s meeting that Putrajaya has yet to direct Deloitte to audit 1MDB’s accounts for the current financial year despite growing concerns over the state investor’s financial health.
In reiterating the need for 1MDB’s latest accounts to be audited quickly, Nur Jazlan said until the financials are completed and audited, it would be a hindrance to their ongoing investigation into the firm.
Is somebody still cooking something in the kitchen? Why hasn’t the audit started yet? It is impossible that the management accounts are not yet ready to be audited. It’s mid-June already. Are the employees in the accounts department of 1MDB on sabbatical leave since last Hari Raya?
Why is the Prime Minister actively withholding a proper governance procedure?
Tony Pua was also perplexed by what by the self-confessed ‘professional’, Arul Kanda had to say about all this. The so called professional have made a reply to Tony on why the external audit has not yet started but that exposes the CEO to further embarrassment because it seems, Arul Kanda had missed the point.
The MP rebuked and chastised the under sieged CEO of 1MDB by giving him a lesson in logical thinking:
Arul Kanda’s denials about audit miss the point
KUALA LUMPUR: Petaling Jaya Utara MP Tony Pua, while commending Arul Kanda Kandasamy for his quick response, pointed out that the 1MDB Chief has completely missed the point that he was making on Deloitte Malaysia not being able to commence audit work on the company for the last financial year.
“His denial does not explain anything,” said Pua who is also DAP National Publicity Secretary. “Arul Kanda’s commendably immediate denial misses the point and was an attempted misdirection.”
“He should stop giving excuses and give his assurance to Malaysians that the statutory financial audit for the scandal-ridden 1MDB for the 31 March 2015 financial year-end will be completed by 30 September 2015 as required by law.”
Arul Kanda in his denial, he lamented, said “the board and management of 1MDB met Deloitte as early as February 2015 to discuss commencement of an audit after the financial year-end of 31 March 2015.”
“We want to know about the controversial assets held in various overseas banks. We want to know what was the true debt situation in 1MDB and the extent of the company’s cash flow problems.”
Unfortunately, he said, “what we didn’t get from Arul Kanda was when the audit will actually commence. More worryingly, we would like to ask the President of 1MDB, why is it that since the discussion more than three months ago, the audit for 1MDB has not commenced.”
Arul Kanda claimed that “the audit of a major 1MDB subsidiary, Edra Global Energy Bhd, has already commenced and was well under way”, noted Pua.
“I asked about ‘the holding company, 1MDB, where all the controversy over its funds, cash flow problems and alleged misappropriations lie, but Arul Kanda tells us that the audit has commenced on its subsidiary.”
The commencement of audit work on Edra isn’t at all surprising, he added. “It was expected because the company was preparing for their initial public offering.”
Arul Kanda, Pua further noted, separately highlighted the fact that “1MDB is currently undergoing a thorough review and investigation of its accounts by the National Audit Department.”
“Let me state that the fact that the Auditor-General (A-G) was reviewing the past financial statements of 1MDB does not in any way justify the fact that the statutory audit for 1MDB has not commenced,” said Pua. “These are two different and independent processes which surely a multi-billion ringgit public-interest company cannot afford to neglect.”
In fact, he said, given that there was a parallel on-going A-G review, Deloitte should be invited to commence their audit earlier so as to provide the auditors with a longer lead-time to complete the report.
Arul Kanda have managed to make even Tony Pua sound smarter. And that is the quality we have among the people who are supposed to handle 1MDB.
Intelligent people will instantly know that if an audit has not yet started, then it has not yet started. There is no need to go around in a roundabout just to say something has started when clearly it hasn’t.
In normal audit practice, management accounts of all subsidiaries should have already been consolidated in the management accounts of the holding company by end of financial year. External auditors should have by now, sit in the audit room prepared by 1MDB HQ office and commence the audit (whether executing the ‘stat audit’ – a jargon for checking the legal corporate documents, or other preparatory process).
Again, it is the middle of June now. Their financial year ended 2.5 months ago. If they have to wait for the Edra Global Energy to be audited and the audit report to be signed, then there won’t be enough time for 1MDB’s audit report to be completed and signed to meet its September dateline. Arul Kanda was just saying something that does not make sense.
Only the most ignorant among us would believe his press statement.
From all the news above, it is without any doubt that not only 1MDB have failed in its corporate governance, it also gives so many excuses and idiotic responses, it is not presumptuous to say that there is a deliberate attempt to cover up wrong doings.
And to answer Nazir Razak’s ultimate question, the ultimate answer is, yes it has.
Today, Tun Dr Mahathir wrote his latest blogpost which summarises the history of 1MDB and its stupid business deals. We assume there will be another round of Falsely Answered Questions (FAQ) which will not answer anything. Get ready.
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