NAJIB'S SON NIZAR IN THE SPOTLIGHT: 1MDB auditors to be probed, regulator confirms

KUALA LUMPUR ― The country’s accounting regulator will investigate the auditors who closed the books of controversial state-owned investment firm 1Malaysia Development Bhd, local daily The Star’s business pullout reported today.

According to StarBiz, the Malaysian Institute of Accountants (MIA) confirmed the probe, with its chief executive officer, Ho Foong Moi, stating that it is in response to two complaints filed by DAP MP Tony Pua in March and May.

“We have a due process to investigate any complaints made against any of our members,” Ho was quoted saying.

But Ho declined to provide a timeline for the probe, noting that it was a complex case, adding that it would depend on whether MIA can obtain the relevant documents and prompt responses from those involved.

Ho reportedly said that any party with possible conflict of interests would not be part of the MIA probe on the 1MDB auditors.

She was responding to a question on the impartiality of the probe as nine MIA council members work for those linked to 1MBD ― three audit firms and the Accountant General’s office.

The audit firms that had worked on 1MDB’s accounts are international accounting firms Ernst & Young, KPMG and Deloitte, while the Finance Ministry’s Accountant General’s Department advises the Finance Minister on the appointment of MIA council members, StarBiz said.

StarBiz also said this is the first time MIA is probing the 1MDB auditors, with the possible penalties for misconduct ranging from a reprimand, fine, a maximum three-year suspension or a ban from practising.

But Ho also pointed out that the MIA can only probe individuals and not firms.

Public Accounts Committee chairman Datuk Nur Jazlan Mohamed previously called for MIA and regulator Audit Oversight Board to step in, but the latter said it only has oversight over auditors of public listed firms, StarBiz reported.

Last week, PKR MP Rafizi Ramli pressed Deloitte for explanations on why it had agreed to audit 1MDB’s accounts when one of its key staff is Finance Minister Datuk Seri Najib Razak’s son Nizar Najib, claiming that there could be conflict of interest as the latter was an executive director with Deloitte’s financial advisory services.

In a separate report by Sin Chew Daily today, MIA said in an email reply regarding Nizar’s role that it is currently following up on Pua’s complaints on 1MDB auditor Deloitte and would not be able to make any comments on any allegations against the firm for now.

But MIA also told the Chinese language daily that it will not hesitate to take action if it finds any of its members breaching rules and laws.

Sin Chew Daily said it has not received any response from Deloitte at the time of writing, despite sending an email enquiry last Thursday.

MIA’s Ho also confirmed to Sin Chew Daily that the regulator’s registrar will following procedures based on its disciplinary rules to conduct the probe after receiving Pua’s complaints, with the body to seek further supporting documents from the complainant if necessary.

The MIA registrar will then refer the complaint to its Investigation Committee, with the latter to scrutinise all accusations raised, Ho said.

In March, Najib ordered the A-G and PAC to investigate 1MDB ― which is owned by the Finance Ministry, amid growing demands for explanations over the state investment firm’s allegedly opaque investment decisions and for its RM42 billion debt. - Malay Mail