KUALA LUMPUR: It has been four days since the Oct 31 deadline has passed and 1Malaysia Development Bhd (1MDB) and its subsidiaries have yet to submit their audited financial statements for the financial year ended March 31, 2014 (FY14) amid controversy surrounding its ballooning debts of RM36 billion.
A check with the Companies Commission of Malaysia (SSM) yesterday revealed that the sovereign wealth fund had not submitted the relevant accounts to the commission by the time the office closed at 4pm.
This is despite Prime Minister Datuk Seri Najib Razak, who is also the chairman of the advisory council of 1MDB, telling Parliament that two subsidiaries of 1MDB — 1MDB Energy (Langat) Sdn Bhd and 1MDB Real Estate Sdn Bhd — will file their audited 2013 and 2014 financial year accounts by Oct 31.
DAP national publicity secretary and MP for Petaling Jaya Utara Tony Pua said the breach of the Companies Act by a company wholly-owned by the finance ministry, is “shocking and unacceptable”.
“It shows lack of accountability and good governance especially since the group has accumulated debts in excess of RM36 billion, of which at least RM15.4 billion is guaranteed or given a letter of support by the federal government,” he told reporters at the Parliament lobby yesterday.
“This is despite the stated ambition by the group to publicly list its energy subsidiary by the first quarter of next year. How can the group prepare for listing to raise an alleged RM18 billion when it cannot even complete its accounts after more than two years? Will prospective investors trust the management or will they be spooked by the complete lack of accountability?” Pua asked.
Pua noted the extended delay in the submission of the accounts could be due to 1MDB’s auditors’ refusal to sign off the accounts, especially without the necessary disclaimers, notes and qualifications.
“The size of the debts, coupled with the lack of transparency and good governance, points to an extremely high risk of financial collapse not only of 1MDB, but the entire Malaysian financial system,” he said.
This is not the first time 1MDB had missed the cut-off submission date. It submitted its annual accounts for FY13 seven months after the deadline, in April this year.
This article first appeared in The Edge Financial Daily, on November 5, 2014.