Reveal details of 1MDB settlements, says academic

 

In the latest 1MDB settlement, auditing firm KPMG has agreed to pay the government RM333 million.

PETALING JAYA: An academic has urged the government to ensure greater transparency in order to build trust and confidence in the country’s institutions and the rule of law.

Geoffrey Williams of the Malaysian University of Science and Technology said transparency was not limited to the government but was also needed in the private sector which was subject to regulatory frameworks.

He was commenting on settlements between the government and certain companies over the 1MDB scandal.

In the most recent settlement, auditing firm KPMG agreed to make a RM333 million settlement with the government to resolve claims of alleged negligence and breach of contract in its audit of 1MDB’s financial statements.

Geoffrey Williams.

The settlement is valued at more than 800 times the audit fees earned by KPMG, which had previously denied the allegations and vowed to “vigorously” contest the claim.

While the settlement is aimed at resolving all claims related to KPMG’s fiduciary duties, the details remain unknown.

Williams said in legal cases and matters of governance, transparency was vital and that the details of this settlement and other such cases, particularly those involving public funds, should be made public.

“Even if the deal conceals names to avoid incriminating individuals, the auditor-general and the Public Accounts Committee, for example, should be given information so that regulations and laws can be enforced or changed.”

He said the negative consequence of not doing this was the perception of malpractice in the system, which includes public and professional bodies that are supposed to subscribe to the highest level of integrity and have a fiduciary duty to the public.

“Trust is the basis of any successful economy and society. When trust is gone it’s hard to get it back and hard to move on.”

Muhammad Mohan.

Transparency International Malaysia president Muhammad Mohan also called for transparency on the settlements, saying non-disclosure clauses should not be used as an excuse to avoid making the agreements public.

While he lauded the government’s efforts to recover taxpayer money, Mohan said the government, through the respective regulatory bodies, must hold the companies involved accountable.

He said these regulatory bodies should ensure the companies put in place corrective actions to ensure good governance and avoid a repeat of similar problems.

“Otherwise, what kind of message are we sending out if people can just pay their way out of their problems? ” - FMT