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Deloitte to pay Malaysia $80 milion as settlement over 1MDB scandal
"This marks another success in the Malaysian government's continuing recovery efforts against parties involved in 1MDB, SRC and its related entities. The Malaysian government is determined to ensure that appropriate actions are taken against all individuals or entities involved, directly or indirectly in the global 1MDB scheme," Finance Minister Zafrul Abdul Aziz was quoted as saying in the statement.
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Malaysia's former prime minister Najib Razak arrives at the Kuala Lumpur High Court for his trial over 1MDB corruption allegations in Kuala Lumpur on April 15, 2019. (AFP/-)
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udit firm Deloitte will pay $80 million to the Malaysian government to settle all claims over the auditing of accounts belonging to scandal-plagued state fund 1Malaysia Development Berhad and its sister company SRC International, the Finance Ministry said Wednesday.
"This marks another success in the Malaysian government's continuing recovery efforts against parties involved in 1MDB, SRC and its related entities. The Malaysian government is determined to ensure that appropriate actions are taken against all individuals or entities involved, directly or indirectly in the global 1MDB scheme," Finance Minister Zafrul Abdul Aziz was quoted as saying in the statement.
The ministry noted that the settlement with Deloitte marked the largest related to 1MDB by an audit firm in Southeast Asia.
Deloitte was engaged in auditing both 1MDB and SRC International from 2011 before resigning in 2016.
When the US Department of Justice filed a civil forfeiture suit against 1MDB in July 2016, Deloitte issued a statement saying the financial statements it audited for the beleaguered firm in 2013 and 2014 should no longer be considered reliable.
Deloitte was 1MDB's third auditor after KPMG and Ernst & Young were sacked. Ernst & Young was dismissed after refusing to sign off on 1MDB's 2010 financial statement while KPMG was dumped over its inquiries into 1MDB's assets in the Cayman Islands.
The United States, which is investigating 1MDB for fraud and money laundering, estimates that some $4.5 billion have been misappropriated from the state fund by people close to former Prime Minister Najib Abdul Razak.
The billions were allegedly used to buy luxury properties, yachts and paintings, and even finance the Hollywood movie "The Wolf of Wall Street."
The state fund was started by Najib in 2009. The scandal was partly to blame for his downfall in the May 2018 election and led to his conviction and a 12-year prison sentence in July. He remains free pending his appeal against the Kuala Lumpur High Court ruling.
Besides Deloitte, Malaysia has also wrangled out a $3.9 billion settlement from Goldman Sachs last year, in exchange for the government dropping all criminal charges against the US investment banking giant over the $6.5 billion fund it raised for 1MDB through bond sales that saw the bank receiving $600 million in fees, deemed as being exorbitant when compared with industry norms.
Last Friday, the government reached a $700 million settlement with AMMB Holdings Berhad, the parent company of local lender Ambank Group, over its involvement in the issuance of 1MDB bonds.
