‘2010, 2011 and 2012 audits not a fair assessment of 1MDB’

PETALING JAYA: State investment fund 1MDB today said its financial statements for the financial years ending March 2010, 2011 and 2012 did not provide a true and fair assessment of the company.

In a statement, it said it had received a letter dated June 8 from KPMG, which was the company’s auditor for the years in question.

“In the letter, KPMG advised us that 1MDB ‘should immediately take all necessary steps to prevent any further or future reliance’ on the three audit reports for the financial years ending March 2010, 2011 and 2012,” it said.

1MDB said it had been informed by KPMG that the decision was reached after going through the recently declassified auditor-general’s report on the company “and other relevant documents that were withheld from them by the previous management of the company”.

“If the documents had been disclosed to the auditors, KPMG believed the information ‘would have materially impacted the financial statements and the relevant audit reports,” it added.

It said KPMG had advised it to notify the relevant authorities of the latest status of the audit reports.

KPMG’s audit reports of 1MDB were reportedly the last accepted financial statements for the investment fund.

In a written reply in Parliament dated Nov 16 last year, the finance ministry said 1MDB’s financial statements for 2015 and 2016 were not completed as the police had not returned documents seized from 1MDB’s office in July 2015.

This was after 1MDB’s previous auditor, Deloitte, issued a statement in July 2016 saying the audit it had conducted on 1MDB in 2013 and 2014 should no longer be relied upon. Deloitte resigned as 1MDB’s auditor shortly after.

KPMG audited 1MDB’s books from 2010 to 2012 before having its services terminated in December 2013.

1MDB’s first auditor, Ernst & Young, was fired in 2010 for raising questions on investments, as previously reported by the Wall Street Journal.