Home Business Malaysia, 1MDB seeking more than $5.6 billion in damages from KPMG partners

Malaysia, 1MDB seeking more than $5.6 billion in damages from KPMG partners

Malaysia’s government and state fund 1Malaysia Development Berhad (1MDB) are seeking over $5.6 billion in damages from KPMG partners for alleged breaches and negligence linked to a corruption scandal at the fund.

Audit firm KPMG denied the allegations and pledged to vigorously contest the suit filed against 44 current and former partners and linked to its audit of 1MDB’s financial statements between 2010 to 2012. The suit, which the finance ministry confirmed had been filed and that is the latest in a series of suits filed by Malaysian authorities to recover billions of dollars missing from 1MDB in a scandal. And that has implicated high-level officials, banks and financial institutions around the world.

KPMG said in an emailed statement about their disappointment regarding the suit that all allegations as reported in the news are refuted and the claim will be vigorously contested. Malaysia’s finance ministry declined to comment further due to sub judice. Lawyers for 1MDB did not immediately respond to a request for comment. According to the lawsuit, the plaintiffs allege that about $3.2 billion were misappropriated from 1MDB and its subsidiaries during the period KPMG served as the firm’s auditor.

The plaintiffs said that a proper audit by KPMG would have identified fraud risk warning signs which the firm would have had a duty to report and that would have led to the discovery of the fraud at 1MDB sooner. The plaintiffs also said that they would seek the full amount misappropriated, including interest accrued as well as additional costs. The Malaysian government and MoF Inc, a statutory body under the finance ministry, would also seek 2.63 billion ringgits ($627.83 million) from the KPMG partners to cover losses incurred in bailing out 1MDB.

Deloitte PLT which took over as 1MDB’s auditor after KPMG, paid $80 million to Malaysia’s government last month to settle claims related to its dealings with 1MDB. At least six countries have opened investigations into 1MDB, co-founded by former prime minister Najib Razak.

Previous articleA fine mess: Weak inflation prompts a global central bank reset
Next articleFacebook and Instagram will invest over $1 BLN in content creators


Please enter your comment!
Please enter your name here