Did 1MDB mislead auditors over Caymans funds, asks DAP

DAP lawmaker Tony Pua said until now, the RM4.07 billion balance of 1Malaysia Development Bhd’s financial statements for the year ending March 2014 had not returned to Malaysia or to 1MDB. – The Malaysian Insider file pic, January 9, 2015.Sovereign fund 1Malaysia Development Bhd (1MDB) is in for questioning again, over US$1.23 billion of its funds in the Cayman Islands which have not yet been repatriated despite a directive to do so.DAP lawmaker Tony Pua today asked whether the scandal-ridden fund had also misled auditing firm Deloitte Malaysia into thinking that the amount would be repatriated by the end of November, in order to have its March 2014 financial statements signed off."Should Deloitte Malaysia have exercised extra diligence before accepting at face value 1MDB's promise of a full US$1.23 billion redemption by the end of last year?"Failure to do so would create a massive liquidity risk for 1MDB," said the Petaling Jaya Utara MP and DAP national publicity chief.1MDB's financial statements for the year ending March 2014 were filed in October 2014, where it was disclosed that the balance of US$1.23 billion (RM4.07 billion) would be received in full before the end of November 2014, noted Pua, even citing the page number, 93, of the the financial statement.But Pua noted that 1MDB's chairman Tan Sri Lodin Wok Kamaruddin had on December 23 said that the fund only “expects to redeem the remaining amount in the coming months".Pua said that was contrary to what was stated in the financial report, adding that there was no trace of the money returning to Malaysia or to 1MDB."Lodin must explain and be accountable for the reason as to why the funds are not redeemed and received despite a clear directive and authorisation by the 1MDB board of directors," Pua said."Has there been a 'new’ decision by the 1MDB board of directors to suspend the above decision and delay the redemption of the Cayman funds indefinitely?"In particular, has there been a change of heart only after the financial auditors, Deloitte Malaysia, agreed to sign of the financial report on the November 5, 2014?“Therefore, the question then arises as to whether Deloitte Malaysia had been misled by 1MDB into signing off the 2014 financial report on the basis that the full value of the Caymans fund will be received," Pua said."Perhaps the funds in the Cayman Islands are tied up in 'investments' of highly questionable value, which if disposed today will result in massive unbearable losses to 1MDB?"An estimated RM18 billion of 1MDB's money is parked in the Cayman Islands under a "segregated portfolio fund", a move which has drawn intense scrutiny and criticism from the opposition.Pua pointed out that if not for the promised receivable of US$1.23 billion, 1MDB would not have passed the “liquidity risk" test as the company was expected to fully repay an RM2 billion outstanding loan by the end of November 2014."The financial auditors may well have to offer their 'qualified opinion' as to whether 1MDB can remain a going concern," Pua added. – January 9, 2015.