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Business Crimes BulletinColumns & DepartmentsLitigationSecurities LitigationWhite Collar Crime

Business Crimes Hotline

By Colleen Snow
March 01, 2019

Securities Commission Malaysia Issues Maximum Fine for Deloitte Related to 1MDB Audits

On Jan. 30, 2019, the Securities Commission Malaysia, the country's securities and corporate regulator, announced that Deloitte would be fined the maximum amount allowable ($535,612) related to its audits of Bandar Malaysia and 1MDB Real Estate Sdn BHD (now known as TRX City Sdn Bhd) — both of which are controlled by the Malaysian sovereign wealth fund, 1Malaysia Development Bhd. (1MDB). Two days before the Deloitte fine was made public, it was reported by the South China Morning Post that the Securities Commission Malaysia was continuing to investigate Deloitte and KPMG for their involvement in the 1MDB scandal, including whether the auditors were aiding in the scheme or were negligent in their work. The names of the auditors under investigation were not disclosed. KPMG is reportedly in the process of negotiating a deal with the Malaysian enforcement authority.

The Securities Commission Malaysia found that Deloitte had committed four serious violations of Malaysia's Capital Markets and Services Act (2007) when it failed to immediately report accounting irregularities to the authorities and obtained insufficient documentation in relation to the audits it carried out for years ending March 31, 2015 and 2016.

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