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1MDB’s new management is investigating the testimony given by the former Malaysia chief of Deloitte LLP in defence of an audit conducted on the troubled state fund.
Thursday 22, November 2018
(Bloomberg)--1MDB will take appropriate action in line with findings from the probe as well as advice from the Attorney General’s Chambers, Finance Minister Lim Guan Eng said in a written response to parliament on Wednesday.
That was in reply to a question from a lawmaker on whether any action will be taken against Tan Theng Hooi, who was Deloitte’s country managing partner until 1 June, when he became a senior adviser at the firm. Tan had defended the auditor’s opinion on 1MDB’s 2013 and 2014 financial accounts to the parliament’s Public Accounts Committee, before Deloitte said in July last year that its audited financial statements for those years shouldn’t be relied upon.
The auditor told 1MDB in 2017 that it planned to resign, without giving a reason. Representatives for Deloitte didn’t immediately respond to requests for comment.
Previous auditors of 1MDB, whose full name is 1Malaysia Development Bhd., include KPMG and Ernst & Young, according to transcripts from the Public Accounts Committee. The PAC put together a 106-page report to say it found $4.2 billion of unauthorized and unverified transactions at the state fund, but the report was protected by the Official Secrets Act since 2016.
Soon after sweeping to power in May, Prime Minister Mahathir Mohamad ordered the auditor-general to publicly release the PAC report. A month later, KPMG retracted its audit reports for financial years ended March 2010, 2011 and 2012, saying it didn’t have access to relevant documents that Malaysia’s new government has since declassified. The withheld information would have “materially impacted” the assessments had it been made available to the auditor, KPMG said in a letter to 1MDB dated 8 June.