No orders to stop Deloitte’s 1MDB audit, says Arul Kanda

International auditor Deloitte started looking into 1MDB’s accounts for the current financial year in February, the state investor says today. – The Malaysian Insider file pic, June 11, 2015.

1Malaysia Development Berhad (1MDB) has denied claims that the Finance Ministry prevented international auditor Deloitte from auditing the debt-laden state investment arm’s accounts for the current financial year.

1MDB president and group executive director Arul Kanda Kandasamy said 1MDB had met with Deloitte as early as February to discuss starting the audit for the financial year.

He said that 1MDB’s board was maintaining a regular dialogue with Deloitte on the audit process.

“The board and management of 1MDB met Deloitte as early as February 2015 to discuss commencement of an audit after the financial year-end of 31 March 2015,” said Arul in a statement today.

“In fact, the audit of a major 1MDB subsidiary, Edra Global Energy Berhad, has already commenced and is well under way.”

He added that DAP lawmaker Tony Pua’s statement today that the ministry and company directors were “refusing to allow Deloitte” to begin auditing 1MDB “is absolutely incorrect and untrue”.

“1MDB is currently undergoing a thorough review and investigation of its accounts by the National Audit Department.

“Management time is fully focused on this, given the significant public interest to complete the review as soon as possible.”

The Public Accounts Committee (PAC) yesterday said Deloitte, which last audited 1MDB’s accounts for the financial year-ending March 31, 2014, had not received instructions to start an audit this year.

PAC chairman Datuk Nur Jazlan Mohamed said an appointed auditor needed about three months to complete the accounts for the financial year, and any more time than that was considered “late”.

Deloitte is 1MDB's current auditor after taking over from another leading firm, KPMG.

Since its inception, 1MDB has changed auditors three times.

Nur Jazlan said PAC will summon Deloitte's predecessor, KPMG, next week as it audited 1MDB's 2011 and 2012 accounts.

The bipartisan committee will next summon Arul and 1MDB former CEO Datuk Shahrol Azral Ibrahim Halmi in August.

Besides PAC, the auditor-general is also going through 1MDB's books, with a preliminary report expected to be submitted to Parliament this month.

- TMI