Updated: Sat, 22 Feb 2014 03:22:41 GMT | By The Malaysian Insider : Malaysia

1MDB should be more transparent in corporate reporting, says anti-graft body

1Malaysia Development Bhd’s failure to file its audited accounts for the financial year ending March 2013 with the regulators raises questions over its commitment to transparency in corporate reporting, Transparency International Malaysia (TI-M)  said today. 1Malaysia Development Bhd, or 1MDB, is a government sovereign wealth fund. The...


Malaysia Insider

1Malaysia Development Bhd’s failure to file its audited accounts for the financial year ending March 2013 with the regulators raises questions over its commitment to transparency in corporate reporting, Transparency International Malaysia (TI-M) said today.

1Malaysia Development Bhd, or 1MDB, is a government sovereign wealth fund.

The anti-graft watchdog said in a statement that corporate activities should be reported in a timely manner, and must show accountability, accuracy and completeness in its records.

TI-M added that failure to do so would contribute to a negative impact on the perception of corruption in the country.

"1MDB was reported to have failed to file its audited accounts for the year ending March 2013. And coupled with the apparent change of its financial auditors, this raises questions over its commitment to transparency in corporate reporting," TI-M said.

The watchdog added that last year, state petroleum company Petronas scored full marks for its organisational transparency in its study entitled “Transparency in Corporate Reporting: Assessing Emerging Market Multinationals”.

It added that information related to Petronas ownership structure was easily available in the public domain, allowing citizens, civil society, regulators, lawmakers and investors to know where they were operating.

TI-M said that this was a positive step in building and reinforcing a culture of business integrity within the oil firm's corporate structure.

TI-M also called on 1MDB to be more transparent, adding that this was an important criterion for companies to demonstrate their commitment to the United Nations Convention Against Corruption.

It added that in the interest of good governance, 1MDB, and by extension the government, should be more transparent in its corporate reporting, including mandatory reporting of any transfer of funds, especially when it involves large amounts.

"Allegations of financial irregularities must be addressed promptly to allay fears from the public and investors of possible abuse of public funds," it added.

TI-M also said that corporations must adhere to strong corporate governance reporting and rules to protect the interests of both their majority and minority shareholders, adding that government-linked firms were of no exception.

1MDB yesterday issued a statement saying it was poised to get "strategic value from its energy assets" in both the domestic and global arena.

It said that due to its new business direction, it had asked and was given an extension to file its returns by March 31, 2014.

It said since 2012, its new business direction has helped it grown exponentially, requiring consolidation of new subsidiaries into the group.

"1MDB has been granted an extension of time up to the 31st of March 2014 to file its annual returns to the Companies Commission of Malaysia.

"1MDB expects to file and submit its audited accounts in accordance to the extension granted by SSM, as it has in the past years," it added in the statement.

It also confirmed that it had appointed Deloitte, a Big 4 accounting firm, to complete the audit for the year ended 31st March, 2013, saying this was done after "it was mutually agreed with KPMG that the firm would cease to be 1MDB’s auditors". – February 22, 2014.

0Comments