29 November 2014
The Auditor-General (A-G) said today he had no reason to investigate Malaysia Airport Holdings Bhd (MAHB), over the construction of the RM4 billion low-cast-carrier terminal klia2, as well as the scandal-ridden 1Malaysia Development Berhad (1MDB) as these firms have been audited by big international firms.
Tan Sri Ambrin Buang told a forum on government accountability in Kuala Lumpur today that the firms were already audited by "one of the big four" auditing companies.
"At the moment, we aren't touching public-listed companies. MAHB is a public-listed company.
"Their accounts are being audited by the big four. There is no reason for us to audit their accounts. It is already being done," said the A-G to a question from the audience on the issue.
He added that the government needed to give his department the green light first for it to scrutinise MAHB's accounts.
"We have to have discussions. I cannot go in without proper authority," he said.
But he added that his department reviewed from time to time the list of companies they investigated, adding that they would begin with any firm the Public Accounts Committee (PAC) recommended.
Auditor-General Tan Sri Ambrin Buang says 1MDB is already being audited by the big four. – The Malaysian Insider pic by Zhafri Azmi, November 29, 2014.On 1MDB, he said the state sovereign funds had already given clarification on its investment and business strategies.
"What do you want us to do? As far as their accounts are concerned they have already been audited by the big four," he said.
Ambrin added that 1MDB had already filed its accounts with the Companies Commission of Malaysia, which had not raised any objections.
However, fellow panellist Tony Pua, the MP for Petaling Jaya Utara who also sits on the PAC, argued that the A-G’s audit of 1MDB’s accounts was necessary as the private firms may have overlooked certain aspects.
He said that private auditing firms would not quiz 1MDB as to why they had paid fees, commissions and expenses at an excess of 10% to raise bonds, when other governments paid at a far lower rate.
“So if I were from PricewaterhouseCoopers, as long as I can see that Goldman Sachs received 10%, officially the receipt and payment given to Goldman Sachs, that’s what I put in the accounts,” said the DAP publicity chief.
“Deloitte wouldn’t ask how come you (1MDB) pay 10%, other people pay 5%, or 0.1%. So the role of our government’s auditors is to look at the performance of it and value audit if our companies are actually spending our money in a value-for-money method.”
Critics of 1MDB have questioned the fund's heavy debts, its use of money and its opaque operations.
Among its staunchest critics is Tun Dr Mahathir Mohamad who had called on Putrajaya to explain how the fund had benefited Malaysians, especially since it incurred a RM38 billion debt in just five years of its operations.
Dr Mahathir had said that there was no need for 1MDB as it only served to add on to the country's debt.
However, 1MDB chairman Tan Sri Lodin Wok Kamaruddin had said that its assets stood at RM51.4 billion, about RM2.5 billion more than its liabilities of RM48.9 billion as of March 31, 2014.
He denied that its acquisition of energy assets was overpriced, adding that its real estate investments, including the 70ha financial hub, known as the Tun Razak Exchange (TRX), and Bandar Malaysia, would be profitable in four years.
On Tuesday, PAC chairman Datuk Nur Jazlan Mohamed had said the A-G should investigate klia2 for weakness and irregularities including claims that the Cabinet was not properly briefed on some aspects of construction, thus causing delays and cost overruns.
Nur Jazlan had said that although klia2 was built using private funds, its owner MAHB was a government-linked company.
The Barisan Nasional MP for Pulai also said even though MAHB's finances had been audited, it had never been audited for its performance in terms of construction and delivery of a project.
The following day, MAHB managing director Datuk Badlisham Ghazali said they welcomed the proposal, but added that it wanted to discuss the type of audit with the Transport Ministry first.
PAC in its report found that klia2 did not follow its original concept as the LCCT's replacement, and had instead changed it to be "hybrid" concept airport after numerous upgrades and unexpected cost increases.
"The result found that klia2 will threaten KLIA as the country's main airport.
"Malaysia has lost its golden opportunity to develop the most competitive aviation hub company in the Asia-Pacific region," said the report.
klia2, which started operations on May 2 this year, was built to cater for 45 million passengers annually. The cost of construction ballooned from an initial RM1.7 billion to RM4 billion. – November 29, 2014.
Original Source: www.themalaysianinsider.com