Deloitte raided over 1MDB case

KUALA LUMPUR: POLICE were seen carting away 11 boxes of documents following a raid on the office of accounting firm Deloitte Malaysia in relation to the 1Malaysia Development Bhd (1MDB) scandal.

The seven-hour raid took place at the Deloitte office in Taman Tun Dr Ismail here.

Policemen from the federal police Commercial Crime Investigation Department (CCID) were seen loading the seized documents into a police van before leaving the building at 5.55pm.

Deloitte is the first accounting firm raided by police in relation to the 1MDB case.

CCID acting director Datuk Saiful Azly Kamaruddin confirmed the raid was in connection with the 1MDB case.

He said the raid started at 10.45am, but no arrest was made.

It was reported that Securities Commission Malaysia (SC) fined Deloitte RM2 million in January for failing to discharge its statutory obligations, including not immediately reporting irregularities in its audit.

The fine was in connection with the RM2.4 billion sukuk murabahah programme issued by Bandar Malaysia Sdn Bhd in 2014.

Deloitte was the statutory auditor for Bandar Malaysia and 1MDB Real Estate Sdn Bhd for the financial years ending March 31, 2015, to 2016.

SC said Deloitte had committed two breaches under Section 276(3)(b) of the Capital Markets and Services Act 2007 (CMSA) for failure to immediately report to the commission irregularities which might have a material effect on the ability of Bandar Malaysia to fulfil its obligations in repaying sukuk holders any amount under the sukuk programme.

Several auditors have been associated with 1MDB since its inception, beginning with Ernst & Young, which resigned; KPMG, which was fired after asking for more information on the fund’s assets; Deloitte, which quit after the United States Department of Justice filed suits to recover assets acquired with misappropriated 1MDB funds; and Parker Randall after Deloitte left.

The audit for 1MDB for the financial years of 2010, 2011 and 2012 was done by KPMG before it was replaced by Deloitte Malaysia for refusing to validate accounts worth US$2.32 billion (RM9.48 billion).

Deloitte joined in 2013 but resigned in February 2016 after the DoJ filed complaints seeking to

recover more than US$1.7 billion in assets traceable to funds allegedly misappropriated from 1MDB. It was replaced by Parker Randall.

Last year, KPMG released a statement claiming that the books it had audited for 2010, 2011 and 2012 were not “true and fair” assessments of 1MDB’s funds and that it lacked full access to relevant documents that were declassified only when the new government took power.