Saturday, October 03, 2015

Delay in completion and submission of 1MDB's financial statements to the Companies Commission blatant attempt to prevent truth from being exposed to public

It has been reported yesterday that 1Malaysia Development Bhd (1MDB) has failed to lodge its financial statements with the Companies Commission on 30 September 2015, which is the deadline to submit its accounts for the year ending 31 March 2015.

The excuse provided by 1MDB is that the delay stems from the company not being in control of key documents in its financial accounts after raids and the seizing of documents in July by the police and the special task force comprising Bank Negara Malaysia, the Attorney-General, the Inspector General of Police and the Malaysian Anti-Corruption Commission (MACC).  1MDB President, Arul Kanda claimed that “it (the delay) can’t be helped”.

The excuse is so lame because, it has already been discovered by the Public Accounts Committee (PAC) during our meeting with 1MDB’s auditors, Deloitte Malaysia, that the latter was not requested nor was it allowed to commence its audit as at Jun 2015.

The then-Chairman of the PAC, Datuk Nur Jazlan Mohammad had told the press that Deloitte has yet to be directed by the Finance Ministry to do commence the audit more than 3 months after the financial year has ended.  He said that Deloitte “wanted to do so but the ministry has not given the go ahead yet. So Deloitte has not been given the instruction to start an audit yet."

Hence the claims that all the documents are with the relevant investigating agencies are but lame excuses to cover up the fact that 1MDB never intended for the accounts to be published by 30 September anyway.

It is worth noting that this is not the first time 1MDB is late with its financial accounts. The wholly-owned Government subsidiary is not only a repeat offender, it never once submitted their audited accounts on time since its inception in 2009.

Such complete disregard for timely regulatory compliance demonstrates 1MDB's contempt for good corporate governance and financial accountability, where the Prime Minister is the Chairman of the Board of Advisors.

In any event, even if the documents are with the relevant enforcement authorities, it should not be difficult for Deloitte to gain access to them to conduct the necessary verifications.  Why does 1MDB need another 6 months’ extension before the audit can be completed?

The question that Arul Kanda needs to answer is, has Deloitte already been given the green light and instructions to commence audit on the 1MDB holding company?  Or is it Arul Kanda’s strategy of covering up the shenanigans in 1MDB by perpetually delaying the completion of 1MDB’s books until such a time when all the company’s assets are stripped to plug the missing billions of ringgit?

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