Thursday 5 March 2015

1MDB's "attacks" politically motivated, who cares?

I wrote before about 1MDB and its new CEO Arul Kanda. A few snippets:

"Another thing that will serve the fund and its communication team well is to rid itself of the notion that all its critics have a political agenda.

That's undeservedly self righteous for a fund that has ratcheted up over RM40 Billion in debt, rolled over a RM2 billion debt three times over a year, switched auditors and bosses twice and is in the red to the tune of RM665 million in 2014."

I fully agree with this.

Definitely not a good start by the new CEO of 1MDB, the remark about political motives.

Sarawak Report has reported recently many new articles about 1MDB and related matters. At this moment of time we don't know if the allegations are true and if the huge amount of emails, documents etc. are indeed genuine (Sarawak Report claims to have thousands of supporting documents).

A reaction from 1MDB was very much needed and according to an article in The Star Arul Kanda stated:

"It is clear that the attacks being directed at 1MDB are politically motivated. These are deliberately coordinated attempts to undermine the company by spreading unsubstantiated allegations and speculation, which in turn could potentially harm the economy."

Again Arul Kanda seems to stress a possible political motive about the allegations. But honestly, who cares? 

There are two matters at hand:
  • Are the documents/emails etc. as specifically shown on Sarawak Reports website genuine?
  • Are the conclusions drawn from these documents correct? 

Arul Kanda should start by making a clear statement regarding the first matter, then at least we (interested observers) know were we stand. If they are not genuine, we don't have to bother with the conclusions. If they are genuine, then we can proceed with the second matter at hand.

This blog focusses more on corporate governance issues regarding listed companies, and one company in particular is mentioned in the articles, UBG Bank, here and here. There are several allegations in these articles regarding the deals in which UBG Bank was involved and its subsequent privatisation.

The authorities (SC and/or BM) should investigate these matters and check if all warranties and representations (made by all parties involved during that time) were indeed correct.

"1MDB welcomes the Prime Minister's request for the Auditor General to verify 1MDB's accounts, which have been audited by Deloitte, one of the world’s leading firms."

The verification by the Auditor General is of course welcomed, I hope that all findings will be published in a transparent way, for all to see, if possible backed by evidence.

The last part in the above sentence ("one of the world’s leading firms") is unfortunately not adding much value to the statement. Too many fraudulent companies all over the world (Malaysia is no exception) were audited by the "big four" (besides of course many being audited by other auditors, the "lesser" ones). Anyone still remembers Arthur Andersen? Much more information regarding this subject can be found here.

1 comment:

  1. Worse, 1MDB is playing tai chi with words when it comes to the media.