INTERESTINGLY, the legal system operates in a very bizarre manner sometimes – or even most of the time. The fact that the Finance Ministry (MOF) managed to ‘squeeze out’ RM333 mil (US$80 mil) from a Big-Four accounting giant, KPMG, to resolve all claims related to the latter’s fiduciary duties on its auditing of the 1Malaysia Development Bhd (1MDB) accounts from 2010 to 2012 is surely a valuable ‘trade secret’ worth unearthing.
In a statement yesterday (Sept 16), MOF claimed that the settlement with KPMG is valued at more than 800 times the audit fees earned by the accounting firm and represents one of the largest 1MDB-related settlements by an audit firm in Southeast Asia
Ultimately, the settlement will conclude the civil suit filed on July 6, 2021 against KPMG which will expedite the payment of monies to fulfil 1MDB’s outstanding obligations and save the court’s time and public resources.
Bear in mind, however, that the US$80 mil is still ‘a major victory’ although the Government, Ministry of Finance Inc (MOF Inc), 1MDB and various subsidiaries had originally filed a US$5.64 bil suit on July 6 against 44 partners of KPMG Malaysia during the time the firm was 1MDB’s auditors.
At this juncture, it is unclear if the settlement is one-off or are whether MOF is expecting more ‘payouts’ to come its way from KPMG in the near future.
In a reaction to Reuters on July 9, KPMG had denied the allegations and pledged to “vigorously” contest the suit filed against its current and former partners.
“All allegations as reported in the news are refuted and the claim will be vigorously contested,” KPMG said in an e-mailed statement to Reuters, noting it was “disappointed” with the suit.
Behind the scenes, however, is how Sarawak Report finds itself vindicated – yet not credited at all – by the MOF and its Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz for exposing KPMG vis-à-vis an article dated back to March 20, 2015 entitled “KPMG: Auditors or Fraudsters”.
“So far, Sarawak Report which was the first to publish the facts on KPMG’s failings over 1MDB, its dodgy accounting on the matter and indeed the whole scandal of 1MDB has yet to receive a word of thanks from anyone in this PN (Perikatan Nasional) government who have been so happy to grab the billions returned as a result of our reports,” claimed the investigative journalism portal.
“To the contrary, for years all these characters accused us of lying as we reported 1MDB, right up to the day the money started coming back and they snatched office to receive it.”
In contrast, Sarawak Report said it has to contend with a series of arrest warrants, civil suits by public figures, slurs and lies.
“We take it as a badge of honour as the Datuks of PN grab for the dirty money and let each other off their jail sentences,” added the portal. – Sept 17, 2021