The raid was conducted for more than 5 hours and investigators seized various documents
by RAHIMI YUNUS / pic by ARIF KARTONO
THE police raided Deloitte Malaysia’s office in what is believed to be an operation related to 1Malaysia Development Bhd’s (1MDB) investigations.
According to sources, a team from the Bukit Aman (federal police) Commercial Crimes Investigations Department was dispatched to the accounting firm’s office in Taman Tun Dr Ismail, Kuala Lumpur (KL), at noon yesterday.
“The team conducted the operation to check records and search for documents related to 1MDB. There were at least three unmarked police cars. The police were in the boardroom,” a source who had knowledge of the raid told The Malaysian Reserve (TMR).
It is learnt that the raid was conducted for more than five hours and the investigators seized various documents from the office.
At press time, it was not known whether any arrest was made. Deloitte, in an email reply to TMR, said the police were at its offices to seek assistance in providing records related to 1MDB.
“Deloitte Malaysia is not the subject of the investigation and is cooperating fully with the authorities in their investigation,” the company said.
The operation yesterday came four months after Deloitte was slapped a maximum fine of RM2.2 million by the Securities Commission Malaysia (SC) over infringements related to 1MDB’s subsidiary, Bandar Malaysia Sdn Bhd’s (BMSB) Islamic notes.
The SC imposed the RM2.2 million penalty on Deloitte in January for four breaches under the country’s Capital Markets and Services Act 2007 (CMSA).
The infringements were related to BMSB’s RM2.4 billion sukuk issued in 2014.
Deloitte was the statutory auditor for BMSB and 1MDB Real Estate Sdn Bhd (1MDB RE) for their fiscal years ended March 31, 2015, to 2016.
1MDB RE, which is now known as TRX City Sdn Bhd, was one of the third-party security providers of the sukuk.
The Malaysian capital market regulator said Deloitte allegedly committed two breaches under Section 276(3)(b) of the CMSA for failure to immediately report to the SC on irregularities, where a total fine of RM2 million, the maximum amount provided under Section 354(3)(b) of the CMSA, was imposed.
For the remaining two breaches under Section 276(1) of the CMSA, Deloitte was fined a total of RM200,000 due to its failure to send a copy of BMSB’s audited financial statement (AFS) 2015 and AFS 2016 to MTrustee Bhd within seven days after furnishing the AFS 2015 and AFS 2016 to BMSB.
The action by the SC last January made Deloitte the first auditing firm to be charged in relation to 1MDB.
It was reported that the SC was investigating KPMG and Deloitte over the two firms’ audit of 1MDB.
Deloitte was the third audit firm among the “Big Four” that appraised 1MDB’s finances before it quit in 2016 after the US Department of Justice filed lawsuits to recover assets acquired with funds stolen from 1MDB. Before Deloitte, Ernst & Young appraised the scandal-ridden sovereign wealth fund in 2010 before it was fired.
KPMG took the baton and audited 1MDB between 2010 and 2012.
The audit firm was also sacked. Last year, PricewaterhouseCoopers was appointed by the new Finance Minister Lim Guan Eng to review and audit 1MDB finances, weeks after the new government took over office following the May 9 general election victory.