News | KPMG agrees to pay RM333mil over suit linked to 1MDB auditing

PETALING JAYA: KPMG has agreed to a RM333 million settlement to resolve claims of alleged negligence and breach of contract in its audit of 1MDB’s financial statements, the finance ministry said.

Finance minister Tengku Zafrul Aziz said the settlement, which is valued at more than 800 times the audit fees earned by KPMG, represents one of the largest 1MDB-related settlements by an audit firm in Southeast Asia.

It will also conclude the civil suit filed by Putrajaya on July 6 this year against the auditor.

“This demonstrates the government’s resolve to diligently pursue recovery efforts against all parties involved in 1MDB and its related entities.

“The government will ensure that appropriate actions are taken against all individuals or entities involved, directly or indirectly, in the global 1MDB scheme,” he said in a statement.

This settlement, Tengku Zafrul went on to say, would not affect or compromise Malaysia’s claims against individuals like Low Taek Jho (Jho Low), the fugitive financier in the centre of the financial scandal as well as others linked to it.

Two months ago, Putrajaya and 1MDB filed a US$5.64 billion (RM23.63 billion) lawsuit against 44 partners of audit firm KPMG Malaysia over alleged negligence and breach of contract in its audit of 1MDB’s financial statements from 2010 to 2012.

The plaintiffs claimed losses over breaches that KPMG’s partners allegedly committed in their role as auditor for 1MDB.

In the statement of claim the plaintiffs said more than US$5.6 billion had been misappropriated from 1MDB, of which US$3.197 billion was misappropriated in 2010, 2011 and 2012 when KPMG was the auditor for 1MDB.

KPMG denied the allegations and vowed to “vigorously” contest the claim. – FMT

credit photo: Mohd Izwan/The Edge

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