Audit firm Deloitte to pay Malaysia $80m to settle claims linked to 1MDB

Photo: Reuters

Audit firm Deloitte PLT will pay Malaysia‘s government $80 million to resolve all claims related to its auditing of accounts of scandal-linked state fund 1MDB and its unit SRC International from 2011 to 2014, the finance ministry said on Wednesday.

Deloitte has been under scrutiny for its role in auditing the financial statements of 1Malaysia Development Berhad (1MDB), a state fund at the centre of a globe-spanning corruption scandal.

Malaysian and U.S. authorities say at least $4.5 billion was stolen from 1MDB between 2009 and 2014 by high-level officials of the fund and their associates.

“The successful out-of-court settlement with Deloitte will expedite the payment of monies to fulfill 1MDB and SRC’s outstanding obligations, which would otherwise be delayed by potentially protracted and costly court battles,” the ministry said in a statement.

Deloitte did not immediately respond to a request for comment and made no mention of the settlement on its website or social media accounts.

The government said in November that 1MDB was still $7.8 billion in debt following the scandal.

The agreement with Deloitte is the largest 1MDB-related settlement involving an audit firm in Southeast Asia, and is the latest after similar deals reached with U.S. investment firm Goldman Sachs and Malaysian banking group AmBank.

Last week, AmBank said it would pay $700 million to settle claims related to 1MDB probes, a hefty sum that the group said would have a material impact on its earnings.

The ministry said the deals would not affect or compromise Malaysia‘s claims against fugitive financier Jho Low or other parties wanted in connection with the 1MDB scandal. Low has consistently denied wrongdoing.

In 2019, Malaysia‘s securities regulator fined Deloitte 2.2 million ringgit for failing to report irregularities in relation to an Islamic bond issued by a 1MDBlinked company.

After the U.S. Justice Department filed civil lawsuits in 2016 over 1MDB, Deloitte said the 1MDB finance statements it had audited should no longer be relied upon.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.