Last week Wall Street Journal published an explosive story revealing that last year, 1MDB had transferred at least USD850 million (RM3.66 billion) to an offshore company set up to appear that it was owned by IPIC, the white knight which is bailing out 1MDB’s massive debt.
This revelation is the latest exposé on all the billions unaccounted for since 2009. Based on this new evidence obtained and sighted by the WSJ, it seems that 1MDB had transferred those billions to a company called ‘Aabar Investments PJS Ltd’ instead of to ‘Aabar Investments PJS’ – the proper subsidiary of IPIC.
This is a clear cut allegation, based on investigations which initially had led to the sacking of IPIC’s own managing director – Khadem Al Qubaisi back in April.
But how did 1MDB respond to this?
The fact is that the allegations contained within this article are simply a regurgitation of old claims carried by the Wall Street Journal in September, which it has re-written and re-published without offering any new information or evidence.
With respect to 1MDB’s past dealings with IPIC, the two companies continue to enjoy a strong business relationship..
Furthermore, IPIC has since reaffirmed its commitment to working with 1MDB via a public statement issued in October 2015, and made interest payments on the aforementioned bond in October and November 2015.
Any person with an IQ slightly above a chimpanzee would have realised that 1MDB did not address any of the allegations at all. The Wall Street Journal did not publish a story that alleged the business relationship between IPIC and 1MDB is in disarray nor have they published a story saying that IPIC is backing out from any business deals they had mutually agreed upon.
WSJ is alleging that 1MDB purposely had sent billions of ringgit to the wrong company which was set up and closed down as soon as it received the money.
The fact that 1MDB did not answer this directly and repeated the now boring phrase – ‘recycling old allegations’ shows that they clearly are under pressure. This allegation is new and have never been brought up. Everyone was shocked by this allegation; embezzlement and a blatant breach in corporate governance is not a laughing matter.
It’s either 1MDB do not understand English and misread the whole story by WSJ or their press release was written by overpaid nincompoops.
We are more incline to believe the latter.
But the fact that they could not satisfactorily answer this new allegation give rise to the perception that they really did make those wrongful transactions. It really should have been a yes or no answer.
1MDB cannot claim they have answered the allegations. And it is shameful that they are consistently trying to trick the public into believing that they have.
We should be thankful to WSJ for exposing this matter because their external auditors could not have detected this inter-company transactions when there’s mala fide involved. For the year ended 2015, Deloitte must send at least manager level auditors to dissect and discern any transaction which would have otherwise be missed by lower level auditors.
Audit firms have the habit of sending junior auditors to do the menial and routine work in order to save cost, knowing the fact that the top management of these clients they are auditing could easily dupe the lower ranking auditors. And audit firms usually close one eye on this because after all, the clients are the ones paying the audit fees.
We had so many financial fiascos involving audit firms failing to do their work diligently. Enron, Worldcom and Tyco are a few such examples. Even the great old Barings Bank was brought down because none of the auditors could detect Nick Leeson’s losses hidden in one of the accounts.
It just took a few unscrupulous people in world renown organisations to bring the whole thing down in split seconds.
The fact that 1MDB hoped it could hide things from the public is a stark reminder on how this organisation is filled with unsavoury characters compounded by their own ineptitude.
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