by Ganesh Sahathevan
In July 20201 The Government Of Malaysia demanded USD 5.6 Billion from international audit firm KPMG for losses arising out of KPMG's negligence in the conduct of its 1MDB audit.
By September 2021 the Malaysian Government accepted just USD 80 Million in settlement of claims against KPMG.
While it is true that litigation can be a long drawn out, expensive, affair, it is hard to see what cost-benefit calculations the Malaysian government relied on to determine that a discount of almost 99% of the amount claimed was reasonable.
The settlement is suspicious and raises US FCPA and UK Bribery Act issues, given the way in which KPMG's business is organised, and given the extent of the 1MDB affair.
TO BE READ WTH
Saturday, July 10, 2021
Will former FM Lim Guan Eng's Special Officer Dato Ooi Kok Seng be among KPMG partners who are being sued more than USD 5.6 Billion for 1MDB losses
by Ganesh Sahathevan
Malaysia's government and state fund 1Malaysia Development Berhad (1MDB) are seeking more than US$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 (Jul 9) 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.
It would be interesting to see if former Finance Minister Lim Guan Eng' Special Officer, KPMG partner Dato Ooi Kok Seng, is among those sued, and what his defence might be.
TO BE READ WITH
hursday, March 14, 2019
Malaysia's Minister For Finance appoints KPMG partner as "Special Officer",despite KPMG's contribution to 1MDB's losses
Kok Seng is the Partner-in-Charge for KPMG Northern Region. He has extensive audit, accounting and consulting experience both in Malaysia and Washington, D.C., USA. His experience is not limited to audit assignments but also covers the various corporate exercises which include corporate advisory on initial public offerings, cross border acquisitions, special issues and share valuation. He currently sits in the Penang State Shared Services and Outsourcing and Creative Multimedia Content Council. | ||
(see http://aamc2015.usm.my/index.php/2-uncategorised |
KPMG's _proudly boast on their website:
Special officer to the finance minister, Dato’ Ooi Kok Seng, who was also present, had mentioned that the government had not yet received the funds from a one-off special dividend from Petroliam Nasional Bhd (Petronas) of RM30 billion which will be used for tax refunds announced during Budget 2019. “At the moment the funds are not in as it is only a few days past the new year. However, [the public] should not worry as the finance minister has given the assurance that full refunds will be made through the special dividend,” he said.
Dato’ Ooi Kok Seng is KPMG Head (North).He seems to have won the favour of the Penang Government and the DAP, despite KPMG's 1MDB history.This excerpt from the DAP website is indicative of their relationship:
The Penang state government has chosen the internationally renowned accounting firm, KPMG and its senior partner Chartered Accountant Ooi Kok Seng, for the verification exercise and to formulate the template and presented to the public. As an independent audit firm, KPMG is required to uphold the highest standards of professional standards ensuring that it complies with the principles of objectivity, independence and no conflict of interest before undertaking any task.
KPMG's contribution to 1MDB's losses has been well documented by this writer and by Sawarak Report (see stories below).
This conflict adds to that concerning PwC, Goldman Sach's auditor for some 37 years, who have nevertheless been appointed to oversee 1MDB.
END
Don't Ask Us! - KPMG Global's Astonishing Response on 1MDB
“much of what has been reported was in the public domain since at least 2014, and hence there is also the question of why the Global Board took no action despite that fact?”
Dear Mr SahathevanI refer to your email below addressed to Mr John Veihmeyer, Global Chairman, KPMG International Cooperative (KPMG International).I am the General Counsel of KPMG International and am responding on behalf of Mr Veihmeyer.KPMG International is a Swiss Cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to bind or obligate any member firm.KPMG International does not have any relationship with, or connection to, 1MDB”.Yours faithfullyTom Wethered
“nor does KPMG International have any such authority to bind or obligate any member firm” [Tom Wethered]
Franchise without accountability?
Having their cake and eating it
“KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We have more than 155,000 outstanding professionals working together to deliver value in 155 countries worldwide.”
ABOVE ALL, WE ACT WITH INTEGRITY
We are constantly striving to uphold the highest professional standards, provide sound advice and rigorously maintain our independence….
The Global Board is the principal governance and oversight body. The key responsibilities of the Board include approving long-term strategy, protecting and enhancing the KPMG brand, and approving policies and regulations
Leadership
Internationally, the affairs of KPMG are the responsibility of several bodies.
KPMG’s Positive PR
KPMG’s brand, Andrew says, is all about being independent and objective because the firm and its employees has a public interest of responsibility to the broader community.“We have to ensure that we uphold the governance standards in every country for our multi-national clients. They expect the same standards in Kuala Lumpur as they do in Johannesburg, Frankfurt or New York,” he says.He adds that corporate governance defines the KPMG brand. “If we don’t meet the governance standards, then people won’t have confidence in our business. Integrity is at the heart of everything we do.“This is ensuring that we understand that our duty is to the broader community than just to any particular client or particular transaction. Because if we do some work, which turns out to be incorrect, it’ll affect our global brand,” he says.Every three months, KPMG employees are required to sign a declaration to maintain their independence around their audit clients. [The Star Online 10th Aug 2013]