(Updated)

High Court grants stay of second disciplinary proceedings of Deloitte auditor involved in 1MDB audit

High Court grants stay of second disciplinary proceedings of Deloitte auditor involved in 1MDB audit
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KUALA LUMPUR (Oct 25): The High Court on Monday granted a stay of the second disciplinary proceedings that Deloitte auditor Ng Yee Hong is supposed to face with the disciplinary committee (DC) of the Malaysian Institute of Accountants (MIA) in relation to 1Malaysia Development Bhd's (1MDB) audit, until the hearing of the merits of his judicial review challenge is heard and disposed of.

The consent order for stay was recorded by Justice Datuk Ahmad Kamal Md Shahid as the respondents from the DC, Heng Yee Kiat and Shaarvin Raj, who appeared for MIA, had no objections to the application brought by Ng's counsel Wong Ming Yen, who is from Messrs Malik Imtiaz Sarwar.

Heng is from Messrs Christopher & Lee Ong, and as he was not present on Monday, Wong mentioned on his behalf.

The High Court granted leave to hear the substantive judicial review on Oct 7, 2019,  but went on to dismiss the judicial review on Feb 26, 2020 following a preliminary objection.

On appeal, the Court of Appeal on Oct 30, 2020 reversed the High Court decision and remitted the case back to the High Court, with hearing fixed for Jan 11 next year.

The second complaint was made by Damansara member of Parliament Tony Pua Kiam Wee against Ng in relation to 1MDB's accounts on May 26, 2015, while the first was lodged by Andrew Anand Solomon Devasahayam on March 31, 2015.

This is in relation to Ng having signed the 2014 1MDB audit accounts. It is understood that a third complaint had been made against the Deloitte auditor with the MIA. The first complaint follows Ng allegedly failing to report money laundering breaches with regards to 1MDB to Bank Negara Malaysia.

The DC had already decided on the first complaint, but at the time of the first judicial review hearing last year by Ng, the MIA was barred from reporting its outcome, while the second complaint made by Pua has yet to commence.

Shaarvin, who is from Messrs Kumar Partnership, and Heng are now appearing for their clients, after the court had on July 2 allowed Ng's application to bar Messrs Steven Thiru & Sudhar Partnership from appearing for both the DC and MIA as the firm had appeared for them in the first proceedings.

Deloitte had taken over auditing 1MDB's accounts from KPMG in December 2013, after KPMG was reportedly dismissed following a difference of opinion on the fair value of 1MDB’s investment in Bridge Global SPC through Brazen Sky Ltd.

Deloitte verified the accounts for the 2013 and 2014 financial years, with an unqualified opinion without any qualification or emphasis of matter. It, however, quit as 1MDB's auditor in 2016.

1MDB subsequently said the audit reports issued by Deloitte in connection with the 2013 and 2014 financial statements of 1MDB should no longer be relied upon.

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Deloitte auditor involved in 1MDB audit succeeds in bid to remove law firm from acting for MIA panels

Surin Murugiah