Tuesday, June 26th, 2018


KPMG tells 1MDB board 2010-2012 audit reports ‘unreliable’

PETALING JAYA: KPMG, one of four external auditors that 1Malaysia Development Bhd (1MDB) hired over the course of 2010 till 2017, has come out as the second auditor to void its audit reports on 1MDB, citing revelations in the declassified Auditor-General's report on the state investment company.

KPMG asked the board of directors of 1MDB to no longer rely on its audit reports for the financial years ending March 31, 2010, 2011, and 2012.

Deloitte, which was 1MDB's auditor between 2013 and 2016, had in July 2016, upon announcing its intention to resign, declared that its audits of the company for the financial years 2013 and 2014, could not be relied on, following the filing of a civil forfeiture action by the US Department of Justice for assets linked to the 1MDB scandal.

The services of 1MDB's first auditor Ernst & Young LLP were terminated before it could complete the audit for the first year, while its latest auditor Parker Randall, was appointed in 2017, months after Deloitte resigned.

According to the 1MDB board today, KPMG advised them in a letter dated June 8 to “immediately take all necessary steps to prevent any further or future reliance” on the three audit reports.

KPMG said it reached the decision after going through the recently declassified Auditor General's report on 1MDB and other relevant documents that were withheld from it by the previous management of the company. If the documents had been disclosed to the auditors, KPMG believed the information “would have materially impacted the financial statements and the relevant audit reports”.

In addition, KPMG has advised the 1MDB board to notify the relevant authorities on the latest status of the audit reports.

In a separate statement, 1MDB announced that the deputy secretary general overseeing government investments at the Treasury, Datuk Asri Hamidon, has been appointed chairman of 1MDB, effective Monday. He replaces former secretary-general of the Treasury Tan Sri Irwan Serigar.

Additionally, 1MDB has formed an executive committee comprising Pricewaterhousecoopers executive chairman Datuk Mohammad Faiz Azmi, government investment company division undersecretary Datin Rashidah Mohd Sies and former Agrobank president and CEO Datuk Wan Mohd Fadzmi Wan Othman. The committee will manage the company's day-to-day operations.

Buffett taps Lee Enterprises to manage many Berkshire newspapers

NEW YORK, June 26 — Warren Buffett’s Berkshire Hathaway Inc today said it hired Lee Enterprises Inc to manage its newspaper and digital operations in 30 markets, hoping to boost readership and draw more advertisers as print circulation declines….

Australian, New Zealand central banks say no plans to issue official digital currencies

WELLINGTON: The central banks of Australia and New Zealand ruled out today the notion that they would issue official cryptocurrencies anytime soon, warning the potential damage to their banking systems could outweigh the benefits.

Tony Richards, head of the Reserve Bank of Australia's (RBA) payments policy, said that bitcoin and other cryptocurrencies had not proven their worth as reliable stores of value or means of payment because of their volatility and vulnerability to hacking.

“Nine years after its launch and about five years since it entered the public consciousness, bitcoin continues to have structural flaws that make it unsuitable for many uses, many of which stem from its inefficient verification process,” he said in the text of a speech given in Sydney.

Given their low usage in Australia, cryptocurrencies were unlikely to have any significant impact on the RBA's oversight of monetary policy and the banking system, he said.

The RBA had no plan for the time being to adopt any new electronic form of money for households, he added.

“Based on our interactions with our counterparts in other countries, it is also not front of mind for most other advanced economy central banks,” Richards said.

The Reserve Bank of New Zealand (RBNZ) also said that while it was open to exploring new technology, it was unclear whether a central bank digital currency will bring conclusive benefits.

While digital currencies could make distribution of money safer and cheaper, they could increase the likelihood of bank runs during periods of financial instability, said RBNZ deputy governor Geoff Bascand.

That was because in times of financial stress, depositors could easily and remotely transfer large deposit holdings to a central bank digital currency, he said.

“A breakdown in the financial system can cause enormous economic and social harm. We could not issue a digital currency if it might undermine financial stability,” Bascand said in the text of a speech at an Auckland conference.

“The payments industry is dynamic, which is good. But the Reserve Bank must be a considered prospector in the exploration for digital currency benefits – we have New Zealand's currency and financial system at stake.”

Wild swings in the price of cryptocurrencies, and fears they may be used for illicit activities such as tax evasion, have drawn the attention of global policymakers.

Finance leaders of the Group of 20 major economies agreed in March to open the door to regulating the booming industry, though they have only just started adopting individual rules due to the difficulty of agreeing on a multilateral approach.

Most central banks are wary of embracing cryptocurrencies and say they have no plans to issue their own digital money with the exception of Sweden, where the shift away from the use of cash is significantly more advanced than in other countries.

Bitcoin prices dropped their lowest in more than four months on Friday, continuing a downtrend driven by authorities' measures to impose tighter regulation on cryptocurrencies. – Reuters

Brexit bill becomes law, allowing UK to leave the EU

LONDON, June 26 — A bill enacting Britain’s decision to leave the European Union has become law after months of debate, the House of Commons speaker announced today, to cheers from eurosceptic lawmakers. Speaker John Bercow said the EU…

Singapore Exchange outlines rules for listing of dual-class shares

SINGAPORE: Singapore Exchange (SGX) launched new rules today to allow firms to list with dual-class shares, shortly after rival Hong Kong exchange introduced such funding structures favoured by tech firms.

Dual-class shares offer extra voting power to top executives seen as protection against pressure for short-term returns, but have faced criticism by corporate governance activists who have warned the structure could be abused by company insiders.

Their introduction in Asia puts the region on a more even footing with New York, which has managed to attract more Chinese tech initial public offerings via the structure.

“SGX today joins global exchanges in Canada, Europe and the US where companies led by founder-entrepreneurs who require funding for a rapid ramp-up of the business while retaining the ability to execute on a long-term strategy, are able to list,” said Loh Boon Chye, CEO of SGX.

The rules are effective immediately, SGX said.

Hong Kong Exchanges and Clearing Ltd launched its new rules from April 30, designed to attract companies with a market cap of not less than HK$10 billion (RM5.1 billion) while Singapore will allow firms valued at S$300 million (RM886.5 million) to list with dual-class shares.

Singapore today also set out various rules for dual listings designed to safeguard investors. They include an equal voting process on issues such as removing directors, variation of shareholder rights and takeovers, and limiting holders of so-called “multi-vote” shares to certain named individuals. – Reuters

‘Staggering’ Bank of England expenses payments shock UK lawmaker

LONDON, June 26 — The Bank of England has paid out “staggering” sums on expenses to two members of its Financial Policy Committee (FPC), a lawmaker from a top parliament committee said today. US-based policymakers Anil Kashyap and Donald Kohn…

US stocks rise modestly amid trade war worries

NEW YORK, June 26 — Wall Street stocks rose modestly in early trading today as worries about burgeoning trade conflicts kept a lid on investor enthusiasm. About 15 minutes into trading, the Dow Jones Industrial Average stood at 24,278.77, up 0.1…

Total, Singapore’s Pavilion Energy sign LNG ship fuel supply chain deal

SINGAPORE, June 26 — Total and Singapore’s Pavilion Energy have signed a non-binding deal through their subsidiaries to develop a liquefied natural gas (LNG) bunker supply chain in the port of Singapore, the companies said in a joint statement…

Iris served with winding-up petition

PETALING JAYA: Iris Corp Bhd was served with a winding-up petition in the Kuching High Court by Dole Sebiro (M) Sdn Bhd, for RM3.16 million owing to the company for works done for projects in Sarawak.

“The company is disputing the sum allegedly due and owing to them and the petitioner is well aware of this fact. The company categorically deny and refute the baseless claim by the petitioner and the company shall through its solicitors prove that the company is actively pursuing the petitioner for a settlement under the whole projects which has not been reached,” Iris said in a stock exchange filing today.

The company noted that the hearing date fixed by the High Court of Kuching and endorsed on the said petition was June 11, prior to the company being served with the petition.

As at today, Iris said it has no knowledge of the next case management and/or hearing date fixed by the Court for the petition.

“The board is seeking the necessary legal advice to remedy this situation.”

In February 2017, Dole Sebiro served the winding-up petition on Iris for a RM8.71 million claim, but withdrew the petition following successful negotiations with Iris.

Iris had appointed Dole Sebiro as subcontractor for a Ministry of Education job to build schools in Sarawak.

Alam Maritim awarded multiple contracts worth RM226m

PETALING JAYA: Alam Maritim Resources Bhd has bagged several oil and gas contracts worth RM226.08 million.

The group said the contracts are for the provision of offshore support vessels for the oil and gas companies and main contractors in Malaysia and the Middle East.

The contracts are a mixture of short- and long-term contracts with a primary period of six months to three years, with an extension option of one to two years.

Alam Maritim expects the contracts to contribute positively to its earnings and net tangible assets for the financial year ending Dec 31 and beyond.

The stock gained 4% to close at 13 sen today on 658,300 shares done.