Deloitte fined £400,000 over company linked to scandal-hit 1MDB | Business

Deloitte has been fined 2.2m ringgitt (£415,000) by Malaysian regulators for failures in its audit of a firm linked to the scandal-ridden state fund, 1MDB.

The Securities Commission Malaysia said Deloitte was reprimanded because it failed to report the irregularities detected in the Sukuk Murabahah Programme, an Islamic bond issued by Bandar Malaysia Sdn Bhd (BMSB).

Deloitte was the statutory auditor for BMSB and its holding company 1Malaysia Development Berhad Real Estate (a subsidiary of state fund 1MDB) for the financial years ending March 2015 and 2016 when the bonds were issued.

The securities regulator said Deloitte’s failure to immediately report irregularities may have a material effect on the ability of BMSB to fulfil its obligations in repaying sukuk holders any amount under the programme.

Imposing a fine of 2.2m ringgit , the regulator said it “finds the breaches committed by Deloitte serious in nature as it has failed to discharge its statutory obligations”.

Malaysia’s former prime minister Najib Razak set up the 2.4bn ringgit 1MDB in 2009 as a state investment fund dedicated to attract investment projects and beneficial developments for the country. The fund ended up accumulating losses of 42bn ringgit.

The corruption scandal at 1MDB, which is overseen by the country’s finance ministry, was uncovered in 2015 when several media outlets revealed the diversion of 2.6bn ringgit to Najib’s private accounts.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Najib, who was in power from 2009 to 2018, denied the accusation, saying the money was a donation from a Saudi prince.

The scandal cost him the general election in May last year. His successor, Mahathir bin Mohamad, reopened investigations into 1MDB.

Najib faces 38 charges of graft in court and his wife, Rosmah Mansor, 17. Both have pleaded not guilty.

The US justice department estimates that about $4.5bn (£3.44bn) was diverted from the 1MDB, $1bn of which may have been laundered in the country with the purchase of real estate, yachts, jewellery and works of art among other goods.

Source link