Southeast Asia is a region in Southeast Asia.
Indonesia
Singapore\sMalaysia
Vietnam\sThailand
Philippines
Myanmar
India
Greater China is a term used to describe a
Asia’s rest
World
Internet Economy & E-Commerce
Technology
Infrastructure and Real Estate
Services in the Financial Sector
Infrastructure for Social Development
Malaysia and 1MDB are suing KPMG for $5.6 billion in damages.
The 1MDB sign as seen from the inside of an automobile. Photo courtesy of Bloomberg Television
Liz Lee and Rozanna Latiff
9th of July, 2021
According to court documents seen by Reuters, Malaysia’s government and state fund 1Malaysia Development Berhad (1MDB) are demanding over $5.6 billion in damages from KPMG PLT for alleged breaches and incompetence related to a corruption crisis at the fund.
KPMG, the audit company, disputed the claims on Friday and promised to fight the lawsuit filed against 44 current and former partners over its audit of 1MDB’s financial accounts from 2010 to 2012.
The claim, filed on Tuesday, is the latest in a series of proceedings brought by Malaysian authorities to recover billions of dollars missing from 1MDB in a scandal that has implicated high-ranking officials, banks, and financial institutions around the world.
KPMG stated in an emailed statement to Reuters that it was “disappointed” with the complaint and that “all allegations as reported in the news are rejected and the claim will be fiercely disputed.”
Due to the pending litigation, Malaysia’s finance ministry declined to speak further. It announced in June that it was in talks with the auditor to reach an agreement.
A request for comment from 1MDB’s lawyers was not immediately returned.
The plaintiffs say that about $3.2 billion was taken from 1MDB and its subsidiaries while KPMG was the firm’s auditor, according to the lawsuit.
The money was part of a bigger sum of $5.64 billion taken from 1MDB between 2009 and 2014, according to the plaintiffs, losses that could have been prevented if KPMG had gathered enough evidence to back up its audit findings.
According to the plaintiffs, a proper audit by KPMG would have uncovered fraud risk warning signals, which the firm would have been required to report, and would have resulted in the fraud at 1MDB being discovered sooner.
The plaintiffs stated that they would seek the whole sum misappropriated, including interest and expenses.
Malaysia’s government and MoF Inc, a statutory organization under the finance ministry, would also ask KPMG for 2.63 billion ringgit ($627.83 million) in compensation for losses sustained in the bailout of 1MDB.
After refusing to sign off on 1MDB’s 2013 accounts, KPMG was fired as the fund’s auditor.
It told 1MDB in June 2018 that it should “now take all necessary steps to preclude any further or future reliance on the audit reports prepared by KPMG Malaysia for the financial years ended 31 March 2010 to 31 March 2012.”
Deloitte PLT, which replaced KPMG as 1MDB’s auditor, paid the Malaysian government $80 million last month to settle accusations relating to its dealings with the fund.
At least six nations have launched inquiries into 1MDB, the Malaysian investment firm co-founded by former Prime Minister Najib Razak.
In a case involving 1MDB, Najib was convicted guilty of corruption and money laundering last year. He denies guilt and intends to appeal the decision.
Reuters
KPMG 1MDB
Every day, you’ll receive articles like these in your email.
Sign up for The Daily Brief, our daily newsletter.
Register for the Newsletter
Related Articles
Regulations & Policy
JP Morgan, Deutsche Bank, and others are being sued by Malaysian state fund 1MDB for fraud.
1MDB is suing Deutsche Bank (Malaysia) for $1.11 billion and JP Morgan for $800 million (Switzerland).
Malaysia’s former Prime Minister Najib Razak has filed an appeal against a conviction related to 1MDB.
Najib is on trial for allegedly stealing $4.5 billion from 1MDB, the public fund he co-founded in 2009.
Deals Deloitte will pay Malaysia $80 million to resolve accusations related to 1MDB.
Deloitte has been criticized for its participation in auditing the state fund’s financial accounts.
Regulations & Policy
AMMB will pay $700 million to the Malaysian government to settle its involvement in the 1MDB affair.
The bank will tighten its due diligence framework by taking corrective action.
To continue reading our free content, create an account.
If you don’t want to get The Daily Brief in your inbox every day, unsubscribe.
REGISTER
Do you already have a login? Here is where you may log in./n
Read More
