1MDB: Fix your own scandal first, Tony Pua

1MDB: Fix your own scandal first, Tony Pua photo 1MDB: Fix your own scandal first, Tony Pua

Controversial government investment arm 1Malaysia Development Bhd has launched another personal attack on its most vocal critic, Petaling Jaya Utara MP Tony Pua, mocking his frequent calls for answers to allegations in news reports.

Although Deloitte is not responsible for any fraud that occurs in 1MDB, said Pua, the worldwide Standards of Auditing (ISA) adopted by the Malaysian Institute of Accountants (MIA) dictates, “the auditor shall maintain professional scepticism throughout the audit”.

With no progress in his persistent pressing of 1MDB over a Wall Street Journal report alleging that the payment was not registered in the accounts of Abu Dhabi’s worldwide Petroleum Investment Corporation (IPIC), Pua today urged Deloitte to explain the alleged discrepancy. The report also stated both IPIC and 1MDB officials did not respond to request for comments prior to the article being published online.

1MDB merely said Pua had made “a recycled and reused statement” and accused him of shamelessly piggybacking on press allegations by repeating the same questions, and also accused him of ignoring facts, changing the topic, and making emotional statements.

He said even if the auditor had already signed off on the audits, it has a responsibility to act if it discovers belatedly that it had been misled in light of the WSJ articles. Do not take our word for it – this information is publicly available.

The link to the Abu Dhabi fund came in 2012, when it agreed to guarantee US$3.5 billion in bonds issued by 1MDB to fund the purchase of some power plants, according to the report.

It isn’t clear how IPIC arrived at the $481.3 million figure and how it relates to the almost $1 billion transfer 1MDB says it made to IPIC.

However, he said, the US$993 million payment was not reflected anywhere in IPIC’s financial statements for the year ending December 2014. No substantial amount of money was received by IPIC, the people familiar with the matter said.

1MDB had refuted the claims, stating that the amount of US$1.4bil was accounted for in its 2014 accounts and certified by its auditors.

“Instead the statements disclosed that 1MDB still owes and additional US$481 million to IPIC for the termination of the said options”, said Pua.

The missing $1 billion is the second payment that 1MDB reported it made and IPIC said it didn’t receive.

“Given the severity of the unproven allegations, the malicious insinuations made and the impact on the 1MDB rationalisation plan, we would have expected at the very least that the WSJ would have the decency and courage to name its source and/or provide proof”.

Pua however pointed out WSJ never asked about the termination of the options over the energy assets.

Deloitte had audited 1MDB’s March 2014 financial statement, in which the state fund said the proceeds of US$1.22 billion derived from the redemption of its investment in the Cayman Islands had been instantly and “substantially utilised to pay debt interest, Aabar options, working capital”.

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