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Tuesday, July 14, 2015

Pua: Lenders should check 1MDB documents for ‘fraud’

If discrepancies are found, the banks should lodge police reports against the company to protect their interests and that of their shareholders.
tony-pua-1MDB
KUALA LUMPUR: If discrepancies are found in 1MDB’s financial statements, Petaling Jaya Utara MP Tony Pua urged the banks concerned to lodge police reports against the company to protect their interests and that of their shareholders.
If 1MDB was now “so audacious as to doctor its financial statements”, added Pua who is also DAP National Publicity Secretary, “I am now seriously concerned about the integrity of the various documents which it has submitted to the Auditor-General.”
“This includes the minutes of the Board of Directors, Directors’ Resolutions, and other relevant documents.”
Pua continued, in a statement, that “he would be very worried if they (documents) have been similarly tampered to hide the wrongdoings of the company and its directors and officers.”
He was calling upon all banks which lent money to 1MDB to refer to the latest audited financial statements for March 2014, in their possession, and provided by the scandal-ridden company which has chalked up RM42 billion in debts in six brief years.
He pointed out that the copy of the Audited Accounts, obtained from the Companies Commission of Malaysia (CCM), uses the word “utilized” in the second paragraph of section 18(ii) on page 93. However, the same documents in the version probably with the banks, reads “set aside” instead of “utilized”, charged Pua. “The meaning has completely changed.”
Pua has reasons to believe that this may not be the only instance of 1MDB altering its 2014 Financial Statements. “I call upon all lenders to peruse through the financial statement with a fine toothcomb to discover all the discrepancies between the original copy lodged with CCM and the ‘doctored’ copy in their hands.”
“This is a very serious issue because it would become a clear breach of warranty and representation made by the company to the banks. Such a breach would be automatically tantamount to an ‘Event of Default’ typical in nearly all loan agreements between lenders and borrowers.”
He referred to in particular section 477A in the Penal Code on “Falsification of Accounts” which metes out a prison term of a maximum seven years, or fine, or both, for those who “willfully and with intent to defraud, destroys, alters, mutilates or falsifies any book, paper, writing, valuable security or account . . . or willfully and with intent to defraud, makes or abets the making of any false entry in, or omits or alters, or abets the omission of alteration of any material particular from or in any such book, paper, writing, valuable security, or account”.
“By triggering the ‘Event of Default’, all of 1MDB’s outstanding loans to several institutions will become immediately due and payable,” warned Pua.
Based on publicly available information, 1MDB may still be owing RM3.5 billion to a consortium of local banks viz. Maybank, RHB, Alliance and HwangDBS Bank. Other banks with hundreds of millions of ringgit exposure to 1MDB include AmBank and Affin Bank.

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