reported today that Malaysian investigators have traced nearly US$700 million of deposits into what they believe are personal bank accounts of Prime Minister Najib Abdul Razak.
WSJ cited documents from a government probe, which both the international financial newspaper and whistleblower website Sarawak Report have obtained.
According to WSJ, the investigation documents mark the first time Najib has been directly connected to investigation into the troubled state investment fund.
“The government probe documents what investigators believe to be the movement of cash among government agencies, banks and companies linked to 1MDB before it ended up in Mr Najib’s personal accounts,” WSJ reports.
“Documents reviewed by The Wall Street Journal include bank transfer forms and flow charts put together by government investigators that reflect their understanding of the path of the cash.”
Meanwhile, Sarawak Report in a separate report said a total of US$681,999,976 (RM2.6 billion) was wire transferred by the Abu Dhabi fund Aabar into the Najib’s private AmBank account in Kuala Lumpur on March 2013, two months before the May 5, 2013 general election.
“The transfers from the fund’s wholly owned Falcon Bank into Najib’s AmPrivate Banking account took place just days after the signing of a so-called ‘strategic partnership’ between Malaysia and Abu Dhabi on 12th March 2013.
“This resulted in the issuing of a US$3 billion bond guaranteed by the the Malaysian government as part of a ‘50-50 joint venture between 1MDB and Aabar’ to develop the Tun Razak Exchange project.”
It said that “stunning body of banking information has recently been received by a number of Malaysia’s top law enforcers, including the attorney-general”.
Sarawak Report also said that another RM42 million had been transferred from SRC International Sdn Bhd, a company linked to 1MDB which is now under the Finance Ministry, into Najib’s three private accounts at AmPrivate Banking in Kuala Lumpur as recently as five months ago.
‘Money taken from SRC International is from KWAP’
“The money taken from SRC International is a particularly shocking revelation, because this was money lent by the public pension fund KWAP and never accounted for,” Sarawak Report said.
Kumpulan Wang Persaraan (KWAP), the country’s second-biggest pension fund, is the retirement fund of mostly government civil servants.
It said on Feb 10, 2015, SRC International had transferred RM10 million into the account number of ‘Dato’Sri Mohd Najib Bin Hj Abd Razak’ at AmPrivate Bank for a corporate social responsibility (CSR) programme.
“Likewise, on December 26th 2014, two earlier transactions had seen the transfer of another RM27 million and RM5 million from SRC International Sdn Bhd into AmPrivate Banking account…, which also belongs to ‘Dato’Sri Mohd Najib Bin Hj Abd Razak’.”
WSJ also revealed that documents in the investigation show SRC International director Nik Faisal Ariff Kamil, had power of attorney over Najib’s accounts. Nik Faisal declined to comment on the matter when approached by the journal.
However, a government spokesperson told WSJ that Prime Minister Najib had not used any funds for his personal use.
“The prime minister has not taken any funds for personal use. The prime minister’s political opponents, unwilling to accept his record or the facts, continue to try to undermine him with baseless smears and rumours for pure political gain.” WSJ quoted an unnamed government spokesperson as saying.
The journal was also cautioned by a 1MDB spokesperson that doctored documents had been used to discredit the government, adding: “1MDB is not aware of any such transactions, nor has it seen any documents to this effect.”
This latest expose, in addition to an earlier report by WSJ on June 19, indicates that part of the 1MDB money had been chanelled to fund Najib’s election campaign in the 2013 general election.
In an immediate response, 1MDB denied any of its funds went to the prime minister.
The Prime Minister’s Office in a statement also dismissed the WSJ report as an attempt at political sabotage against Najib.
PAS’ Dr Dzulkefly Ahmad (centre) holding a copy of the police report outside the Dang Wangi police station after lodging a report over the alleged Mara graft scandal. – TRP pic by Arfa Yunus
G18, a group comprising PAS progressives, urged police to conduct a thorough investigation into the Mara scandal, regardless of the status of the individuals involved.
The group’s secretary Dr Dzulkefly Ahmad said, the expose by Australian daily, The Age on the property scam linked to the government-linked agency, was the reason why the group decided to lodge a police report today.
“We urge the police to conduct an immediate investigation into this because it involves prominent people in the government such as a high ranking officer in Mara and a politician from Umno,” he said, when met by reporters outside Dang Wangi police station here today.
The Age had, two days ago, carried an exposé on a property purchased by Mara in Melbourne.
The report titled “Corrupt Malaysia money distorts Melbourne market” claimed the purchase of The Dudley House, a property in Melbourne, was supposed to be sold at RM51.5 million.
However, the report said, it was bought at a cost of RM65.4 million, which was an additional sum of RM13.8 million.
Shah Alam lawmaker Khalid Samad, who was also present, said the “habit” of government officials “spending the public’s money at leisure” needed to stop immediately.
“This is a breach of trust. RM13.8 million is a lot. Is this the kind of behaviour that should be shown by government officials?
“It was because of The Age‘s report that we have come to know of this story. What about other cases that we don’t know about?
“This is where G18 steps in. We bring hope to the people and make sure their voices are hear. (We are the Harapan Baru)”
26/06/2015 12:43 PM
KUALA LUMPUR: The idea of forming a new moderate Islamic political party has certainly caught the attention of many political observers who obviously vary in the idea of projecting it.
While some observers predicted a better outcome for Malaysian politics as a whole, others described that the move would squander the opportunity for the Malays to regain their power.
The idea to establish such a moderate political party came from those defeated PAS members in their recent party polls. The likes of Mohamad Sabu, Dr Mujahid Yusof Rawa and Dr Dzulkefly Ahmad and others who have all lost to the hardliners in the Islamic party depicted the need to form a party that is not just exclusive for the Muslims – but for all citizens.
But what do ordinary Malaysian citizens think about the idea? Would it benefit the multiracial society in the country or would it just be another political party that merely replaces PAS?
Berita Daily speaks to a number of ordinary people for their feedback.
“Yes, I do support any intention of forming a moderate Islamic party. A new Islamic party is needed to replace both PAS and Umno. I do not support race-based or religion-based party but if a moderate Islamic party is being formed by the likes of Mat Sabu and Dr Mujahid, surely this so called new party will defend the fundamental rights of all Malaysians.
“Umno from the very beginning is a racist party and sadly, PAS who once said that the party is for all, is now heading that way,” said Mandeep Singh, an active member of Kelab Bangsar Utama – a non governmental organisation.
Asked on how he wanted the new progressive party to function, Mandeep who is also an electoral observer, explained that although the party would be headed by Islamists, the party should move away from race and religion based politics.
The 29-year-old Selangorian added that the committee members of the party should start engaging with civil society organisations such as Sisters In Islam (SIS) and Bersih – an effort that was never done by PAS.
“They should sit and discuss with civil rights groups so that they could listen to everyone’s opinion. The new party should not only speak about one race or religion, but must represent Malaysians,” Mandeep said.
For Muhammad Anas Danial Ismail, a new progressive party is needed as the discourse of Islamism in the country has been too polarised by Umno and PAS.
He described that at the moment there is no other alternative for the discourse of Islamism, saying that the conservatives in PAS were no different from those in other right-wing groups such as Ikatan Muslimin Malaysia (Isma).
“As a Malay Muslim, I would say that it is needed because the discourse of Islamism has been dominated by Umno and PAS and there is no other alternative. The conservatives in PAS is similar to those in Isma or in Umno. An alternative voice is needed,” he said when contacted.
Adding further, he explained that the new party must learn how to interact with society in general while saying that it must represent a more inclusive view of Islamism.
“Those in the new party must not act in a ‘holier than thou’ approach and they must be relevant to the society. They must know how to interact with the society and must be more inclusive in their views,” he said.
Tool to secure power
Agreeing with Anas, Muhammad Nazreen Jaafar said it was timely for the country to adopt such an approach, stating that the trend of Islamic conservatism where religion has become a thought control and has become a tool to secure power of interest.
Citing the example of Indonesia, Nazreen who is a former aide to PKR president Dr Wan Azizah Wan Ismail, said that perhaps with the creation of a new progressive Islamic political party, Malaysians could learn from the emergence of various Islamic parties in Indonesia that had led to form a political maturity in the public sphere.
“The advent of Islamic parties in Malaysia would lead into vibrant discussion on the position of Islam in our country. Moreover, we can learn from Indonesia during 90s where the emergence of Islamic parties such as PPP, PKS, PKB and others were able to bring political maturity into our political landscape,” he stated.
Meanwhile, according to Zoe Randhawa, any new party must work towards a secular democracy in order to unite the nation.
While not suggesting the new party to abandon its Islamic rhetoric, the former student at London School of Economics said that the party must also respect the diversity and various beliefs in the society.
“The only way forward is to work towards a secular democracy and that is the only way to unite a multiracial, multi-ethnic society like Malaysia.
“I am not suggesting that they get rid of their Islamic rhetoric but they have to respect that Malaysia is a secular state with multi-ethnicity. The agree to disagree policy being practised by the opposition is making them hard to unite as a front.
“For me, the idea of coalition in politics, should be removed,” Zoe said.
However, for University of Malaya Student Council vice president 2, Kalaivaanan Murty, the idea of progressivism must lead to the idea of significant paradigm shift while rejecting the idea of giving an old book a new cover.
“If the question points out to the idea of replacing an old political party with the new one then I would contend that it shouldn’t. Why do you want to give an old book a new cover. Progressivism if one really connotes to idea of it, leads to the idea of significant paradigm shift. One must be able to perceive matters through the eyes of fair comments and principles.
“If one perceives to be preaching for progressive Islamic views then that particular person should in my humble opinion let go of the religious title and adopt a more Malaysian title.
“Progressive Islamism must be rooted back to the people. It must be of the nature that people from different religion look up to it as the true reflection of the religion and I believe that it should stem within a multi-religious political party,” he opined.
Kalai’s opinion was mirrored by his UM compatriot, Khairol Najib Hashim who said that while it is needed for a new progressive party to be initiated, the party must place the people’s agenda as the party’s main priority.
Khairol, who is the chairperson of Kesatuan Mahasiswa Malaysia, added that the progressives in PAS dubbed as the G18 should charge into action immediately to create a new political platform for Malaysians.
“People’s agenda must be their first priority and then only the party’s agenda. It can’t neglect the promise that the opposition have given to the people.
“In my view, they must act fast and it must be now. Two years away from the next general election and it is not long before it comes. They have to get the platform ready for Malaysians. It is evident in the last GE that Malaysians are hungry for a change,” he said.
Published: 22 June 2015 5:00 PM
Dr Dzulkefly Ahmad berkata penyingkiran mereka daripada kepimpinan tertinggi PAS menyebabkan satu wadah baharu yang lebih kukuh dan inklusif dibina untuk semua rakyat Malaysia. – Gambar fail The Malaysian Insider, 22 Jun, 2015.
Pemimpin PAS yang tewas dalam pemilihan PAS baru-baru ini menyifatkan kekalahan mereka secara blok dalam pemilihan itu menjadi “rahmat yang terselindung” (blessing in disguise) apabila ia membuka ruang membina sesuatu lebih kukuh untuk Malaysia selepas ini.
Setiausaha jawatankuasa bertindak kumpulan 18 (G18) yang tewas itu, Dr Dzulkefly Ahmad berkata penyingkiran mereka menyebabkan satu wadah baharu yang lebih kukuh dan inklusif dibina untuk semua rakyat Malaysia.
“Sejak sekian lama kita bergaduh dalam PAS dengan pendekatan dan pandangan yang berbeza berhubung beberapa perkara, sekarang kita bebas untuk membentuk wadah baharu lebih inklusif untuk semua rakyat negara ini,” katanya kepada The Malaysian Insider.
G18 mengadakan pertemuan pertama di Muar, Johor pada 16 Jun lalu dan membentuk jawatankuasa bertindak di kalangan mereka.
Bekas Timbalan Presiden PAS Mohamad Sabu yang gagal mempertahankan jawatannya dipilih sebagai pengerusi kumpulan ini sementara bekas Naib Presiden Salahudin Ayub dilantik menjadi timbalan manakala bekas Ketua Pemuda Suhaizan Kaiat sebagai penolong setiausahanya.
Semua ahli G18 yang lain dilantik sebagai ahli jawatankuasa (AJK) badan bertindak ini.
Dzulkefly berkata badan ini akan menggabungkan semua masyarakat sivil di negara ini terutama badan bukan kerajaan (NGO) Islam bagi membentuk satu wadah baharu politik Malaysia berteraskan Islam yang lebih progresif berbanding parti lama mereka.
“Kami yakin wadah ini akan lebih diterima masyarakat Malaysia kerana sifatnya yang inklusif dalam sebuah negara berbilang agama dan bangsa ini,” katanya yang juga bekas ketua pegawai eksekutif Pusat Penyelidikan PAS itu.
Selain bersatu dengan PKR dan DAP, wadah baharu itu akan menghimpun semua NGO Islam di Malaysia yang mempunyai cita-cita sama.
Dzulkefly bagaimanapun berkata, beliau dan pimpinan G18 akan mengambil pendekatan tidak akan berkonfrontasi atau menjadikan parti lama mereka iaitu PAS sebagai musuh.
“Kita akan melihat masa depan dan cuba melupakan perbezaan pendapat kita dalam PAS. Kita akan membawa gagasan masa depan dan lupakan masalah lama kita,” katanya.
Dzulkefly berkata, sepanjang Ramadan ini kumpulan berkenaan akan mengadakan mesyuarat bersama pertubuhan Islam dan bukan Islam serta pemimpin masyarkat di seluruh negara bagi menjelaskan peranan pergerakan itu.
Pengumuman lanjut, katanya hanya akan dibuat selepas sambutan Aidilfitri dan selepas mendapat maklum balas daripada akar umbi serta pertubuhan yang berkaitan.
Menurut laporan, kumpulan itu juga merancang untuk menganjurkan pameran bergerak di seluruh negara dan akan menyokong kempen “Harapan Baru” atau “The New Hope and Dream” selepas sambutan Hari Raya Aidilfitri. – 22 Jun, 2015.
PAS progressive leaders who were shown the door in the recently concluded party polls have described their en-bloc defeat as a blessing in disguise, saying that it has opened a window of opportunity to build “something better for Malaysia”.
Dr Dzulkefly Ahmad, the secretary of the acting committee that calls itself G18 (a reference to the 18 ousted PAS leaders) said their exit from the top party posts gave rise to the idea of forming a more inclusive movement for Malaysians.
“Over the years, we have been effected reforms and changes in PAS. Very recently all these seemed to be in danger of being rolled back. Now, we are free to embark on a new endeavour that is more inclusive or all-encompassing,” he told The Malaysian Insider.
He said the G18’s first meeting in Muar, Johor on June 16 was fruitful and had lead to the formation of an action committee for the purpose.He said that Mohamad Sabu, who failed to defend the deputy president post, had been elected as chairman of the group, former vice-president Salahuddin Ayub as his deputy and former Youth leader Suhaizan Kaiat as assistant secretary.
The rest of the G18 were appointed as committee members for the movement.
Dzulkefly said the movement aimed to bring together all like-minded civil society movements and their leaders, particularly Islamist NGOs, to develop a new platform based on political Islam that was truly inclusive, engaging and better able to contextualise the plural demography and the many mutually exclusive demands and constraints.
“We believe this platform will be better accepted by the people because it is the friendly face of Islam, inclusive and adept to a multi-religious and multi-ethnic nation,” he said.
Besides cooperating with Pakatan Rakyat’s PKR and DAP, the new movement will also embrace those who had similar ambitions and vision.
However, Dzulkefly insisted that the G18 would not be confrontational in its approach or turn PAS into an enemy.
“We will look towards the future instead and try to forget our differences. We will bring fresh ideas for the future and embark on the bigger agenda of striving for ‘A Better Malaysia for All’,” he said.
Dzulkefly said during Ramadan, the group would be busy meeting with both Muslim and non-Muslim bodies and community leaders in the country to explain what the movement was about.
He said further announcements would only be made after the Aidilfitri celebrations and after getting feedback from the grassroots and relevant bodies.
The group is reportedly planning a nationwide roadshow and will be seriously advocating their campaign for a politics of “Harapan Baru” or “The New Hope and Dream” after the Hari Raya celebration. – June 22, 2015.
Bolehkah ‘Negara Berpendapatan Tinggi’, pendapatan rakyatnya rendah? (Yang pasti, ‘defisit’ paling sukar di atasi adalah “defisit keyakinan” terhadap PM @NajibRazak)
Rancangan Malaysia Ke-11 baru dibentang. Penulis bersedia mengakui memang nampak hebat. Namun setelah meneliti tidak banyak yang berbeza. Bahkan laras bahasa dan terminologinya pun tidak banyak yang baru, semacam tepu.
Tetapi yang pasti angka-angka sasaran sangat agresif dan terlalu optimis atau ‘bullish’.
Betul, ini pacuan lapse terakhir untuk menerjah tahun keramat 2020. Namun biar munasabah. Penulis seperti biasa akan menulis secara selektif untuk diketengahkan beberapa isu. Ruang terhad.
Sedikit ingatan, Bank Dunia mengiktiraf Malaysia antara negara terkaya di segi sumber per kapita rakyatnya. Memang patut kita hebat. Cuba kita perhatikan dahulu pencapaian RMK-10.
Sayugia diketahui, ahli-ahli ekonomi berpandangan sejarah pembangunan Malaysia diakui sebagai satu yag berciri ‘relative underperformance’ atau ‘prestasi rendah secara relatif atau perbandingan’. Ya, kita mendahului jiran atau ‘peers’ seperti Indonesia, Thailand atau Filipina. Sebaliknya, kita tidak mampu bermegah kalau dibanding dengan Korea Selatan, Taiwan, Hong Kong dan Singapura. Mengapa?
Contohnya, pada tahun 1970 rakyat Korea Selatan punyai “Pendapatan Negara Kasar atau PNK per kapiat (GNI per capita) sebanyak US$270, ketika rakyat kita adalah sebanyak US$470 (mengikut data World Bank Atlas Method). Pada tahun 1980, mereka sudah menghampiri US$1,810 berbanding kita US$1,820.
Tiga dekad kemudian, pada 2011, Korea Selatan terus memecut PNK per kapita rakyatnya cecah US$20,870 sementara Malaysia terus terhambat dalam penomena “Perangkap Pendapatan Sederhana” (Middle Income Trap) dengan hanya mampu mencapai US$8,420 hampir sepertiga mereka.
Nah, mengapa berlaku gejala “perangkap pendapatan sederhana”? Saya juga enggan untuk menggunakan istilah “Negara Maju”. Kedua-dua isu ‘perangkap sederhana dan negara maju berhajatkan wacana yang lain.
Untuk ingatan semua, kita juga adalah sebuah negara yang amat mewah dengan perancangan dan dasar. Ini tidak perlu saya ulangi. Tulisan ini hanya menumpu tentang ‘negara berpendapatan tinggi’.
Jika dasar berjalan lancar, ekuiti bumiputera 50% sekarang, kata pakar (Telah melepasi 3 dasawarsa. Nak berapa lama lagi untuk sampai target ni?..hehe)
OLEH SHERIDAN MAHAVERA (TMI)
Published: 26 May 2015 6:52 AM
Bumiputera mampu kawal 50% saham korporat di Malaysia jika pentadbiran Barisan Nasional melaksanakan dasar perniagaan pro bumiputera yang baik, kata ahli ekonomi Tan Sri Kamal Salih. – Gambar fail The Malaysian Insider, 26 Mei, 2015. Bumiputera mampu kawal 50% saham korporat di Malaysia jika pentadbiran Barisan Nasional melaksanakan dasar perniagaan pro bumiputera yang baik, kata ahli ekonomi Tan Sri Kamal Salih. – Gambar fail The Malaysian Insider, 26 Mei, 2015. Bumiputera boleh mengawal 50% daripada semua saham korporat di Malaysia jika pentadbiran Barisan Nasional (BN) sebelum ini menjalankan dasar perniagaan yang pro-bumiputera dengan baik, kata seorang ahli ekonomi terkemuka yang terlibat membantu kerajaan merangka dasar tersebut.
Tan Sri Kamal Salih dari Universiti Malaya (UM) berkata demikian ketika Putrajaya meneruskan agenda perniagaan bumiputeranya dalam Rancangan Malaysia ke-11 (RMK-11) dilancarkan Khamis lepas.
Kamal berkata, sasaran RMK-11 mencapai 30% ekuiti korporat bumiputera mungkin akan gagal tanpa pembaharuan struktur kepada agensi dan jabatan yang ditugaskan menjalankan agenda itu.
Ini kerana, kebanyakan strategi dalam RMK-11 itu sama dengan apa yang dibuat dan dilaksanakan pentadbiran sebelum ini di bawah Tun Abdullah Ahmad Badawi.
“Semua itu idea yang baik tetapi pelaksanaannya lemah,” kata Kamal merujuk kepada mengapa dasar pada zaman Abdullah, yang beliau terlibat membantu, gagal mencapai sasaran ekuiti bumiputera.
Dasar yang dirangka semasa pentadbiran Abdullah sepatutnya meneruskan dari mana pemimpin terdahulu, Tun Dr Mahathir Mohamad, berhenti.
Menurut sebuah buku oleh ahli ekonomi Edmund Terence Gomez dan Johan Saravanamuttu, ekuiti atau pemilikan saham korporat bumiputera berjumlah 18.9% pada 2004, ketika Abdullah mengambil alih daripada Dr Mahathir.
Angka itu meningkat kepada 21.9% pada 2008, menurut buku itu, “New Economic Policy in Malaysia, Affirmative Action, Ethnic Inequalities and Social justice”.
Ia setahun sebelum Abdullah menyerahkan pentadbiran kepada Datuk Seri Najib Razak, yang kini perdana menteri.
Pentadbiran Abdullah menggunakan pendekatan kluster membangunkan lebih perusahaan bumiputera dengan memanfaatkan rangkaian nilai dan bekalan industri tertentu, kata Kamal yang kini pensyarah di UM.
Katanya, ciri utama ialah sistem tender terbuka, di mana 60% daripada kontrak kerajaan diberikan kepada syarikat bumiputera.
Tender yang dirunding hanya akan diberi dengan berhati-hati, katanya.
Satu lagi inti sari penting ialah, menyalurkan keluar kontrak daripada syarikat berkaitan kerajaan (GLC) kepada perusahaan kecil dan sederhana (PKS) bumiputera apabila mereka mendapat kontrak besar kerajaan.
“Falsafahnya ialah bekerjasama, dan pada masa sama bersaing supaya syarikat bumiputera terbaik boleh maju,” kata Kamal.
Strategi ini, bagaimanapun, tidak dilaksanakan dengan sebaiknya dan pentadbiran Abdullah gagal mencapai matlamatnya.
Apabila menyentuh perolehan kerajaan, majoriti kontrak masih diberi melalui tender tertutup yang dirunding, mendedahkannya kepada pakatan sulit dan rasuah, kata Kamal.
“Apabila GLC mendapat kontrak besar, mereka membentuk anak syarikat yang bersaing dengan PKS bumiputera yang sepatutnya dibantu.
“Akhirnya, gabungan kegagalan institusi, ketidakcekapan, kurangnya integriti, kepimpinan dan pakatan sulit menggagalkan pelaksanaannya,” katanya.
Jika dasar Dr Mahathir dan Abdullah disempurnakan dengan baik sepanjang 30 tahun lalu, Malaysia akan melepasi sasaran 30% ekuiti bumiputera dan mencecah 50% ketika ini, katanya.
Ia hanya mencapai 23.5% pada 2011.
Dalam ucapan RMK-11, Najib berkata, matlamatnya ialah 30% pada 2020 – tahun Malaysia sepatutnya menjadi sebuah negara maju.
Ini akan dilakukan melalui Agenda Memperkasakan Ekonomi Bumiputera yang dilancarkan pada 2013.
Ia memperuntukkan RM47.95 bilion dalam bentuk program untuk PKS bumiputera yang sedang meningkat, yang akan dilaksanakan Unit Peneraju Agenda Bumiputera (Teraju).
Laman web Teraju menyatakan, ia akan dilakukan dengan menyediakan peluang perniagaan dan pembiayaan, pelaburan sektor swasta dan program pembangunan vendor yang melibatkan GLC.
Dalam RMK-11 juga, Najib mengumumkan sebahagian daripada simpanan Kumpulan Wang Simpanan Pekerja (KWSP) boleh dikeluarkan dan digunakan untuk membeli unit amanah dalakam Skim Amanah Saham Bumiputera 2 (ASB2).
Kamal berkata dasar bumiputera Najib dan RMK-11 itu sendiri akan gagal seperti dasar sebelumnya jika beliau tidak melakukan pembaharuan dalam kaedah pelaksanaannya.
Beliau sebelum ini memuji usaha kerajaan memberi tumpuan kepada menggandakan pendapatan kumpulan isi rumah berpendapatan 40% terendah (B40) yang memperolehi purata RM2,500 sebulan.
“Dari sudut pandang keadilan ekonomi, RMK-11 ialah dasar terbaik sejak DEB. Tetapi saya takut sasarannya tidak dapat dicapai jika tiada pembaharuan institusi,” katanya. – 26 Mei, 2015.
By THE EDGE MALAYSIA (TMI)
Published: 25 May 2015 7:00 AM
The backers of 1Malaysia Development Bhd (1MDB) have argued that because international accounting firms like KPMG and Deloitte have signed off all 1MDB’s accounts from FY2010 to FY2014, this meant no money has gone missing and no fraud has occurred.
This argument has been used to justify the not-so-eloquent silence of the management and board of directors of 1MDB, who have refused to respond to questions posed to them about various transactions and the movements of billions of ringgit.
They hide behind that argument despite the fact that 1MDB has run into serious cash-flow problems and can no longer service its debts, and so many questions have been raised about the whereabouts and nature of the so-called Available-For-Sale Investments valued at RM13.38 billion in its accounts for financial year ended March 31, 2014.
Critics of 1MDB have been asked to back off and let the auditor-general complete his work to review the audit of 1MDB.
The argument that because 1MDB’s accounts have been signed off by auditors meant that no fraud has occurred and that money was not missing is flawed. It shows that these people do not know what they are talking about.
They have badly misinterpreted, deliberately or otherwise, the role of external auditors and they do not understand the meaning of an auditor’s report when the auditors sign off the financial statement of a company.
There are no auditors in this world who will agree that their signing off on an account can in any way or form be interpreted to mean that they confirm or guarantee that the accounts are completely true, accurate and do not contain any misstatements, by fraud or error.
The International Standards for Auditing guidelines for auditors state that the external auditor is responsible for obtaining reasonable assurance that the financial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error.
That reasonable assurance is based on the external auditor trusting that the management and board of a company have carried out their fiduciary duties and were not involved in any fraud or have concealed any fraud.
Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement may not be detected, even when the audit is planned and performed in accordance with international accounting standards.
The risk of fraud is higher than those of error because fraud usually involves sophisticated and carefully organised schemes designed to conceal it.
Therefore, it is not the role of an external auditor to determine whether fraud has actually occurred. That is the responsibility of the country’s criminal and legal system.
Indeed, auditors call the discrepancy between what the public expects and what auditors do as an “expectations gap”.
Let us now take a closer look at Deloitte’s audit report issued to 1MDB on November 5, 2014, for the financial year ended March 31, 2014. The fact that it was issued more than seven months after the year-end in itself should raise concerns.
Para 2: The directors of the company are responsible for the preparation of these financial statements so as to give a true and fair view. The directors are also responsible for such internal control as the directors determine what is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Para 3: Our (Deloitte) responsibility is to EXPRESS AN OPINION on these financial statements based on our audit… and perform the audit to obtain REASONABLE assurance about whether the financial statements are free from material misstatement.
The above remarks by Deloitte is a standard template statement issued by auditors to most companies. What is important to note are the following:
1. The directors of 1MDB are ultimately responsible for the accounts in so far as they give a true and fair view. The directors are also responsible for internal controls that are necessary to enable the financial statements to be free from misstatements, whether due to fraud or error. This is NOT the responsibility of the auditor.
2. The auditors only express an opinion that they, as external auditors, have done what is necessary to obtain REASONABLE assurance about whether the financial statements are free from material misstatement.
3. Critically, the external auditors DO NOT express an opinion on the effectiveness of the company’s internal controls.
In short, while auditors should be able to detect defective keeping of accounting records, they cannot detect falsified accounting documents. And neither can they question management decisions on, say, an investment that it made.
The questions asked of 1MDB mainly relate to the effectiveness of internal controls and corporate governance:
– Who approved the agreements and the various payments made since 2009?
– Why were funds diverted from what they were approved for? Why was money sent to an account controlled by Jho Low?
– Why did 1MDB overpay for the power assets, the Penang land and the commissions to the bankers like Goldman Sachs?
– Who verified and agreed to pay the US$700 million to PetroSaudi, purportedly as settlement of a loan?
– Why was Jho Low giving instructions to the management on matters of 1MDB?
– Who agreed to the Aabar options and then agreed to a termination settlement that cost 1MDB US$1 billion?
All these major issues that have been raised are about internal controls, decision-making and corporate governance at 1MDB.
Deloitte, in their audit report, had clearly stated they are NOT expressing any opinion on the effectiveness of 1MDB’s internal controls.
So, please stop passing the buck to Deloitte or using the fact that it signed off on the accounts, to say that nothing wrong has happened and that everything at 1MDB is fine.
And since the auditor-general has merely been asked to audit the work of Deloitte, it is most likely the case that his mandate is no more than that of Deloitte.
It is clear. The board of directors is responsible in ensuring the accounts are true and fair. The board is responsible for internal controls to ensure there is no fraud.
The auditor only expresses a reasonable opinion. Nothing more.
The corporate sector, at home and around the world, is littered with many examples of corporate fraud that escaped the scrutiny of auditors. In a few cases, auditors were also culpable, if not outright complicit.
The largest corporate fraud ever in the world was US energy giant Enron, whose US$78 billion market value was wiped out in days. Former Enron president Jeff Skilling is still serving a 24-year jail term.
And its auditors, Arthur Andersen, one of the Big Four accounting firms in the world then, had to cease operations.
Bernard Madoff’s US$65 billion Ponzi scheme is evidence that funds under management, with third-party valuations by international institutions, may also be subject to misappropriations and fraud. Madoff is currently serving a 150-year sentence in prison.
An article was published in the November 20, 2012 issue of Forbes magazine, on how Hewlett-Packard (HP) lost US$5 billion on a US$11.1 billion acquisition.
HP said it had to write down the value of UK software company Autonomy because it was inflated through serious accounting improprieties, misrepresentation and disclosure failures.
That scam tainted all the auditors involved – Deloitte as the auditors for Autonomy and Ernst & Young, the auditors for HP – for not detecting the fraud.
Need we say more? – May 25, 2015.