1MDB says 2013 and 2014 financial statements cannot be relied on, appoints new auditor

A construction worker at the Tun Razak Exchange development in Kuala Lumpur on Feb 3, 2016.
A construction worker at the Tun Razak Exchange development in Kuala Lumpur on Feb 3, 2016.PHOTO: REUTERS

KUALA LUMPUR - Malaysian state fund 1Malaysia Development Bhd (1MDB) said on Tuesday (July 26) its 2013 and 2014 audited financial statements should no longer be relied upon as part of a precautionary measure it is taking in response to the civil lawsuits filed by the United States' Department of Justice (DOJ) last week in connection with a probe into the controversial fund.

Last Wednesday, the DOJ sought to seize US$1 billion (S$1.36 billion) in assets allegedly bought with money stolen from 1MDB. It said over US$3.5 billion had been misappropriated in transactions over several years using sham corporate vehicles and shell companies to divert funds for personal gain.

In a statement on Tuesday, 1MDB said it had made the decision even though "the Board remains confident that no wrongdoing has been committed by 1MDB and that the past audited financial statements continue to show a true and fair view of the company's affairs at the relevant points in time".

It added that the move was being taken "pending final and conclusive determination by a court of law of certain alleged facts", as described in the DOJ filing.

1MDB also said in its statement that it was committed to finding a new auditor to replace Deloitte, which had previously notified the fund of its intention to resign on Feb 26.

 

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"Until a new auditor is appointed, Deloitte will remain as auditor on record," the statement said.