Friday, September 11, 2015

1MDB US$1.4 BILLION DEPOSIT UNACCOUNTED IN IPIC - WITHER DELOITTE?

The latest unfolding development, in the never ending 1MDB narrative, are press reports that US$1.4 billion made by 1MDB to IPIC as a security deposit is not accounted for in the latter's books.

The Financial Times reported 1MDB's deposit "does not appear to be an obvious corresponding entry in Ipic’s published accounts for either year".

Here are the links to IPIC's  2012 and 2013 financial statements and below are screenshots, which I understand, may indicate that the deposit is indeed unaccounted for. 


Also, in both year end accounts, the Notes do not mention any prerequisite or conditional deposit other than the benefit deriving out of IPIC's guarantee.

As always, 1MDB was swift to respond that "it stands by it's audited accounts".

I won't comment on 1MDB's lack of understanding of the undercurrent meanings that can be arrived from the missing deposit reports but will comment on the significant impact it will have on accounting firm Deloitte.

1MDB in no uncertain terms has specifically stated that its "auditors, Deloitte, made specific and detailed enquiries on these payments prior to signing off on the 1MDB audited accounts".

If these reports, of 1MDB's unaccounted deposit, are accurate and should the IPIC scrutiny of its accounts confirm that that it is indeed the case, it will be huge blow to the reputation of the accounting firm Deloitte