DAP queried if 1Malaysia Development's (1MDB) claim to its auditors that the RM4.07 billion kept in tax haven Cayman Islands would be repatriated by November 2014 was just to get the audit signed off.

"As of today, well into the month of January 2015, there has been no trace of these funds returning to Malaysia or to 1MDB.

"Has there been a ‘new’ decision by the 1MDB board of directors to suspend the decision and delay the redemption of the Cayman Islands funds indefinitely?

"In particular, has there been a change of heart only after the financial auditors, Deloitte Malaysia, agreed to sign the financial report on Nov 5, 2014?" asked DAP national publicity secretary Tony Pua in a statement today.

"The question then arises as to whether Deloitte Malaysia has been misled by 1MDB into signing off the 2014 financial report on the basis that the full value of the Caymans fund will be received?"

Pua said 1MDB chairperson Lodin Wok Kamaruddin ( above ) must explain why the board of directors' directive on Aug 1, 2014 for the funds to be retrieved by November 2014 has not been executed.

Instead, says Pua, Lodin merely hinted in his statement that 1MDB only “expects to redeem the remaining amount in the coming months” this year.

A manoeuvre to help audit?

Pua pointed out that the promised receivable of the RM4.07 billion (USD1.23 billion) would have helped 1MDB pass the “liquidity risk test” required by the auditors, as the company is expected to fully repay a RM2 billion outstanding loan by the end of November 2014.  

"(Otherwise) the financial auditors may well have to offer their 'qualified opinion' as to whether 1MDB can remain a going concern," said Pua ( right in photo ).

In the end, the auditors wrote that 1MDB's cash flow is "expected to be sufficient to cover its cash flow needs".

However, said Pua, the company has yet to pay off its RM2 billion loan till today, "less than two months after the auditors signed off the financial report".

He questioned if Deloitte Malaysia has performed "sufficient due diligence" in ensuring the Cayman Islands investment could in actuality be fully redeemed, and by the original deadline stated.

"In layman’s terms, Deloitte Malaysia has inserted a disclaimer on the valuation of 1MDB’s Caymans investment, that it is unable to verify for certain if the valuation is per disclosed in the financial report," mused the DAP lawmaker.

Yesterday, 1MDB responded to Pua's earlier questions about the Caymans funds and its outstanding loans assuring that the company was using its cash flow in the " most efficient way ".

The company spokesperson told Malaysiakini that 1MDB regretted that third parties not familiar with its decision-making processes are making "speculative statements" about the company.

Pua retorted saying, "How do you honestly expect the financial and investment community, the media, as well as Malaysians at large, not to 'speculate' on what is happening when a wholly-owned subsidiary of the Ministry of Finance which has rapidly accumulated in excess of RM42 billion of debt has been unable to repay a RM2 billion debt which was due in November last year?"

Malaysiakini has already sent an email to 1MDB to clarify the allegations above and is now awaiting their response.

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