Frankly Speaking: Najib, why did you dismiss EY & KPMG?

This article first appeared in The Edge Malaysia Weekly, on June 25, 2018 - July 01, 2018.
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Datuk Seri Najib Razak has claimed innocence about the shenanigans at 1MDB and instead passed the buck to its management and board of directors. He claimed in an interview with Reuters that he would not knowingly do anything that was wrong.

Nice try, but we are not impressed. Here’s why:

First, under Article 117 of 1MDB’s Memorandum and Articles and Association, you, as the then prime minister, was the representative of the shareholder and your written approval was needed for all financial commitments, including investments and matters such as appointment of the board of directors.  In other words, the 1MDB board could not make major decisions without getting your consent.

Second, here are two facts from the Auditor-General’s report on 1MDB, which you refused to make public for reasons we now know:

•    Page 302 states that you (pemegang saham) and the 1MDB board decided to sack EY on Sept 15, 2010, because the external auditor would not sign off the FY2010 accounts unless it was provided with certain documents on the US$1.0 billion joint venture with Petrol Saudi International. If the joint venture was genuine, why didn’t you instruct 1MDB to provide the documents EY needed?

•    Page 303 states that on Dec 31, 2013, the shareholder (you) terminated the contract with KPMG and chose Deloitte as the new auditor. The AG’s report said KPMG wanted to qualify the FY2013 accounts unless it was provided with enough proof on the value of the investments in Bridge Global SPC via Brazen Sky Ltd. Again, shouldn’t you have directed 1MDB to get the documents for KPMG instead of sacking the auditor?

Sacking the auditor is not something companies do easily and you sacked two auditors in the space of four years. In 1MDB’s case, there was clearly something wrong right from the first venture in 2009. Surely, you could not have been so naïve and nonchalant about the billions of ringgit of taxpayers’ money that were at risk?

By the way, we noted that the US Department of Justice (DoJ) said US$20 million that originated from 1MDB’s joint venture with PetroSaudi (inked on Sept 28, 2009) flowed into your bank account at AmPrivate Banking — US$10 million on Feb 23, 2011, and another US$10 million on June 13. That bank account was opened on Jan 13, 2011.

The DoJ said another US$30 million that originated from 1MDB was banked into the same account in Oct 2012 and the biggie amount — US$681 million — in May 2013.

We know what you told Reuters — “I did not operate that bank account”.

Yes, you may not have “operated” the account, but did you  not spend the money that was in it on yourself and others?

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