PM: KWAP's RM200m loss a lesson against relying solely on audit firms

Prime Minister Anwar Ibrahim said relying on audit firms should not be the sole basis for investment decisions, following Retirement Fund (Incorporated) (KWAP)’s loss of nearly RM200 million from an investment in Indonesia.

He said two international audit firms had approved the investment, while a third was unable to complete its verification in time.

Recalling the 1MDB scandal, Anwar noted that even reputable global firms, including Goldman Sachs and a major audit firm, were involved in the case.

“This is a lesson for us. If we don’t check with audit firms, it’s difficult to get approval.

“But if we completely rely on them, there are also risks involved,” he told the Dewan Negara today.

On July 16, Anwar told the Dewan Rakyat that KWAP incurred the losses from its investment in aquaculture start-up eFishery, which stemmed from a “planned fraud” involving alleged manipulation of financial statements by the company’s management.

In a written reply to Subang MP Wong Chen, Anwar said the investment had undergone KWAP’s governance process, including internal assessments, independent due diligence, and reviews of the company’s financial, legal, and operational standing before approval.

KWAP and other investors have since initiated legal action and are pursuing efforts to recover the funds while strengthening internal governance.

Last year, eFishery co-founder Gibran Huzaifah was sentenced to nine years in a Bandung prison for embezzlement and money laundering.

MACC probe initiated

Responding to Senator Abdul Halim Suleiman, Anwar confirmed that MACC is investigating the matter to determine whether there were elements of corruption or abuse of power.

While preliminary findings did not indicate wrongdoing by KWAP, Anwar, who is also finance minister, said he had instructed the management to cooperate with any probe.

He stressed that KWAP’s investment panel comprises professionals and government representatives.

“But ever since I took over the Finance Ministry, there has never been any interference from the government.

“And there was no need (for KWAP) to bring their investment proposals to the government or the finance minister for consideration,” he said.

Anwar also urged the public to view KWAP’s performance in its entirety, noting that the fund recorded RM12.9 billion in net profit the previous year.

“Their funds grew by 9.3 percent. Regardless, we urge them to be more cautious,” he added.

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