KUALA LUMPUR (June 10): 1Malaysia Development Bhd (1MDB)’s president and group executive Arul Kanda Kandasamy, together with the strategic investment fund’s former chief executive officer Datuk Shahrol Azral Ibrahim Halmi, will face the Public Accounts Committee (PAC) in the first week of August.
PAC chairman Datuk Nur Jazlan Mohamed said the duo, who was lambasted for having skipped a hearing with the PAC that was initially scheduled on May 26, will be called up right after the Hari Raya celebrations.
Meanwhile, Nur Jazlan said debt-ridden 1MDB’s auditor Deloitte & Co has yet to be given the green light by the Ministry of Finance (MoF) to audit 1MDB’s latest financial accounts for the financial year ended March 31, 2015 (FY15).
Since Deloitte has not audited the accounts for FY15, it cannot verify if the assets totalling RM13.4 billion in BSI in Singapore and a few other locations is still there or not, said PAC.
He said Deloitte, in conducting their audit of 1MDB’s FY14 financial statements, had viewed the bank statements of 1MDB’s investment in BSI Singapore and a few other locations was able to verify that the fair value of those investments had totalled RM13.4 billion at that point in time.
"They said the money had not disappeared [at the time]," he said.
He added that Deloitte had informed PAC that they had obtained an independent valuation of the assets and that the valuation tallied with the numbers.
On whether the RM13.4 billion is still in cash, units or assets in Singapore after the Malaysian government had redeemed some of the assets, PAC said Deloitte cannot verify that now until they are given the green light to do the audit on 1MDB’s FY15 accounts.
"They have not been asked by their client, and it is up to MoF to instruct Deloitte to start work (auditing 1MDB's books)... They want to do it but have not been given the green light by MoF," Nur Jazlan told reporters after a four-hour long meeting with Deloitte officials at Parliament today.
Also present at the meeting with PAC was Deloitte’s audit partner, Ng Yee Hong, who signed off 1MDB's financial accounts for the year ended March 31, 2014 (FY14).
Nur Jazlan said any company’s accounts would have been audited by now as it takes about two to three months for an audit to be completed, he added.
Nur Jazlan said Deloitte revealed to PAC today that 1MDB had sufficient assets to operate as a strategic investment fund when it last audited its accounts on March 31, 2014.
He said Deloitte also expressed that there was no reason the company cannot continue its operations and that it did not need government guarantees.
Nur Jazlan also brushed aside concerns that there could be political influence in Deloitte’s audit of 1MDB, after questions were raised over the prime minister’s son’s role in Deloitte.
He said Nizar Najib, son of Datuk Seri Najib Razak, is attached with the international auditor’s financial services section and not the audit section.
Deloitte is 1MDB's third auditor since it was set up in 2009 to spearhead development in strategic sectors.
The internationally acclaimed auditing firm’s reputation has taken a beating after it was revealed that the firm had signed off 1MDB's 2014 financial accounts in early November last year. Weeks later, the fund was struggling to repay a RM2 billion loan.
To recap, Petaling Jaya Utara MP Tony Pua had previously called on Deloitte, who remained the auditor for the troubled strategic state investment vehicle, to restate the accounts from the previous year to show the true picture of 1MDB's financial health.
He questioned how Deloitte’s audit partner, Ng, could sign off 1MDB’s March 2014 accounts on November 5 that year without any qualifications when 1MDB was practically insolvent.
The DAP national publicity secretary said Deloitte had signed off the accounts by saying that 1MDB’s funding facilities and net cash flow from its operations were sufficient to cover its cash-flow needs.
However, by the end of the same month of November, 1MDB was forced to repeatedly extend its repayment of a RM2 billion loan, which was due.