Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Malaysia, 1MDB seeking more than $5.6 billion in damages from KPMG partners

Stock MarketsJul 09, 2021 11:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The KPMG logo is seen at their offices at Canary Wharf financial district in London,Britain, March 3, 2016. REUTERS/Reinhard Krause/File Photo

(Corrects headline and paragraphs 1 and 11 to refer to KPMG partners, not KPMG PLT)

By Rozanna Latiff and Liz Lee

KUALA LUMPUR (Reuters) -Malaysia's government and state fund 1Malaysia Development Berhad (1MDB) are seeking over $5.6 billion in damages from KPMG partners for alleged breaches and negligence linked to a corruption scandal at the fund, court documents seen by Reuters showed.

Audit firm KPMG on Friday denied the allegations and pledged to "vigorously" contest the suit filed against 44 current and former partners and linked to its audit of 1MDB's financial statements between 2010 to 2012.

The suit, which the finance ministry confirmed had been filed on Tuesday, is the latest in a series of suits filed by Malaysian authorities to recover billions of dollars missing from 1MDB in a scandal that has implicated high-level officials, banks and financial institutions around the world.

"All allegations as reported in the news are refuted and the claim will be vigorously contested," KPMG said in an emailed statement to Reuters, noting it was "disappointed" with the suit.

Malaysia's finance ministry declined to comment further due to sub judice. In June, it said it was negotiating a settlement with the auditor.

Lawyers for 1MDB did not immediately respond to a request for comment.

According to the lawsuit, the plaintiffs allege that about $3.2 billion were misappropriated from 1MDB and its subsidiaries during the period KPMG served as the firm's auditor.

The amount was part of a larger sum of $5.64 billion allegedly siphoned from 1MDB between 2009 and 2014 - losses that could have been avoided if KPMG had obtained sufficient evidence to support its audit findings, the plaintiffs allege.

A proper audit by KPMG would have identified fraud risk warning signs which the firm would have had a duty to report and which would have led to the discovery of the fraud at 1MDB sooner, the plaintiffs said.

The plaintiffs said they would seek the full amount misappropriated, including interest accrued as well as additional costs.

The Malaysian government and MoF Inc, a statutory body under the finance ministry, would also seek 2.63 billion ringgit ($627.83 million) from the KPMG partners to cover losses incurred in bailing out 1MDB.

KPMG was sacked as 1MDB's auditor after it refused to sign off on the fund's 2013 accounts.

In June 2018, it said it had informed 1MDB to "immediately take all necessary steps to prevent any further or future reliance on the audit reports prepared by KPMG Malaysia for the financial years ended 31 March 2010 to 31 March 2012".

Deloitte PLT which took over as 1MDB's auditor after KPMG, paid $80 million to Malaysia's government last month to settle claims related to its dealings with 1MDB.

At least six countries have opened investigations into 1MDB, co-founded by former prime minister Najib Razak.

Last year, Najib was found guilty of corruption and money laundering in a 1MDB-linked case. He denies wrongdoing and is appealing the verdict.

($1 = 4.1890 ringgit)

Malaysia, 1MDB seeking more than $5.6 billion in damages from KPMG partners
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
ALI KHAN
ALI KHAN Jul 10, 2021 2:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Right decision to go after KPMG. Big 4 auditors have corrupt practices to generate more target recenues for partners.
ALI KHAN
ALI KHAN Jul 10, 2021 2:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Revenues*
Mohd Asmadibin Ramli Ramli
Mohd Asmadibin Ramli Ramli Jul 10, 2021 12:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
why this very problems taken Alies asset i true man why cannot help
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email