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Big challenge ahead for 1MDB’s new auditor, says DAP’s Pua

By Surin Murugiah from The Edge Markets

KUALA LUMPUR (April 22): The DAP’s Tony Pua said 1Malaysia Development Bhd’s (1MDB) new auditor’s biggest challenge now is to audit and verify the purported sale of 1MDB’s Brazen Sky or its assets to a “undisclosed third party”.

He said this in a statement today in response a report by the Singapore Straits Times that 1MDB is expected to ink an agreement with Abu Dhabi’s International Petroleum Investment Co (IPIC) to settle a dispute involving billions of dollars very soon.

In its report, the Singapore daily cited sources as saying the agreement would see 1MDB pay IPIC US$1.2 billion by year end, to settle a loan and accumulated interest from a bailout the IPIC gave 1MDB in July 2015.

Pua, who is DAP national publicity secretary and MP for Petaling Jaya Utara, said report said most of the money would come from the sale of “fund units” from 1MDB subsidiary Brazen Sky to an undisclosed buyer.

He said Brazen Sky is of particular interest to 1MDB watchers because its account in Singapore’s BSI Bank was supposed to be the account used to receive funds from 1MDB’s Cayman Islands account.

“If the Singapore Straits Times report is to be believed, then 1MDB’s newly appointed auditor, Parker Randall will now be faced with their biggest test to date.

“Parker Randall, represented locally by the Malaysian audit firm, “Afrizan Tarmili Khairul Azhar” (aftaas) must carry out the necessary due diligence and audit to ensure that the transactions taking place are bona fide and above board.

“Of interest is the fact that until today, 1MDB has failed to provide any form of clarity of these “fund units” worth US$940 million purported redeemed from a Cayman Island investment fund,” he said.

Pua said that 1MDB has refused, despite repeated demands from the Public Accounts Committee and the Auditor-General to provide financial statements and documents of 1MDB’s overseas bank accounts and assets, including that of Brazen Sky Limited.

“Worse, these assets were purportedly parked in BSI Bank, Singapore which have already had its merchant banking license withdrawn by Monetary Authority of Singapore. When questioned in Parliament, the Minister of Finance responded that these units were not managed by any fund manager or investment bank, while also refusing to where the “units” have been moved to.

“Hence it is critical for Parker Randall or aftaas to confirm the existence and authenticity of the US$940 million worth of “units”. Most interestingly, despite the fluctuating value of investment assets over time, these fund units appeared to have a frozen value of US$940 million since its redemption in January 2015,” he stressed.

Pua said that in addition, should Brazen Sky or its assets be sold, Parker Randall must verify that the sale and purchase transaction is a genuine transaction and not another case of paper shuffling which have taken place earlier in 1MDB’s US$1.8 billion investment in Petrosaudi.

He said it was also important for Parker Randall to confirm and satisfy itself on the identity of the mysterious “undisclosed buyer” of these mysterious Brazen Sky assets as part of its audit verification. The auditors must also trace the money trail of the fund transfers from the mysterious undisclosed buyer into 1MDB before being transferred to IPIC.

“The audit is all the more important given the spotlight 1MDB has, which has caused some half a dozen of banks around the world to be shutdown or penalised for facilitating money laundering transactions.

“Surely, after Deloitte Malaysia disgracefully resigned from 1MDB for failing to detect any of the above illicit and money laundering activities, Parker Randall do not want to follow the same footsteps and sully its international reputation,” he said.

For more on this story go to: http://www.theedgemarkets.com/article/big-challenge-ahead-1mdb%E2%80%99s-new-auditor-says-dap%E2%80%99s-pua

IMAGE: 1mdb logo

2 COMMENTS

  1. All the great minds – financial minds, investigative minds, political minds, curious minds – are all focusing on 1MDB. There is no way Najis can evade all the eyes of the world.

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