(Pic from Free Malaysia Today)
Having already failed to clear its outstanding debt of RM2 billion last year, 1 Malaysia Development Berhad (1MDB) is now under fire for managing to ‘get away’ with delaying the repatriation of Cayman Islands funds.
Public Accounts Committee member Tony Pua today alluded to the fact 1MDB may have misled its auditors on the return of Cayman Islands funds in order to pass its 2014 financial statements.
Pua asked if 1MDB, after having its financial statements signed off by Deloitte Malaysia on November 5 2014, had a “change of heart” to go back on their previously negotiated repatriation of Cayman Island funds amounting to USD 1.23 billion (RM 4.07 billion) initially set for the end of November last year.
“Did 1Malaysia Development Berhad (1MDB) mislead Deloitte Malaysia on the repatriation of the US$1.23 billion “investment” fund in Cayman Islands in order to have the March 2014 financial statements signed off?” he said in a statement today.
Pua recalled that on December 23 last year, 1MDB Chairman Lodin Wok Kamaruddin had hinted in his statement that 1MDB was only expected to redeem the remaining amount of money “in the coming months”, as opposed to what was promised in the 2014 financial report.
On page 93 of 1MDB’s financial statements, Pua said, it disclosed that the Cayman Islands investments was to be received in full “before the end of November 2014”.
“However as of today, well into the month of January 2015, there has been no trace of these funds returning to Malaysia or to 1MDB.” he added.
In demanding that Lodin explain the reason for the delay, Pua pointed at Board of Directors directive issued on 1 August 2014 to return the funds before the end of November last year.
He also said that Deloitte should not have accepted at face value, the promise of the full USD 1.23 billion redemption before the given date, as failure to do so would create a “massive liquidity risk” for the group.
“1MDB has unfortunately continued to express “regret that third party individuals who are not privy to the decision-making process of the company and do not have the full facts or understand the context of decisions that are made internally, continue to make speculative statements concerning 1MDB”,” Pua added.
Malaysiakini reported yesterday that 1MDB had insisted that it “manages the use of its cash in the most efficient way for the company”.
“How do you honestly expect the financial and investment community, the media as well as Malaysians at large, not to “speculate” on what is happening when a wholly-owned subsidiary of the Ministry of Finance which has rapidly accumulated in excess of RM42 billion of debt has been unable to repay a RM2 billion debt which was due in November last year?” Pua asked. –The Rocket
