Deloitte to pay Malaysia $80m for role in 1MDB corruption scandal
Audit giant Deloitte is set to pay $80m to the Malaysian government to settle claims of corruption tied to the auditing of scandal-linked state accounts, the finance ministry has said today.
Deloitte’s fee will conclude its role in the corruption saga that involved former Malaysian prime minister Najib Razak who allegedly used the state fund 1Malaysia Development Berhad (1MDB) and its SRC International unit to embezzle billions from 2011 to 2014.
“The successful out-of-court settlement with Deloitte will expedite the payment of monies to fulfil 1MDB and SRC’s outstanding obligations, which would otherwise be delayed by potentially protracted and costly court battle,” the ministry said in a statement.
The scandal
In May 2019, Malaysian police raided Deloitte’s Kuala Lumpur office as part of an investigation into the billion-dollar 1MDB scandal.
A probe was launched by authorities in at least six countries, investigating the graft and money laundering allegations at the sovereign wealth fund which was established by Razak in 2009.
The former prime minister has since been found guilty, at his first graft trial linked to 1MDB in July last year.
US prosecutors have estimated $4.5bn was embezzled from 1MDB by senior officials and their associates between 2009 and 2014.
Consequentially, Deloitte’s role in auditing 1MDB’s financial statements in 2013 and 2014 had been under investigation.
The news follows last week’s revelation that the Malaysian lender that held Razak’s bank accounts, had agreed to pay an eye-watering $699m in a settlement.
AMMB Holdings Bhd, which shone a light on the scandal, will pay the government over its involvement in transactions related to the 1MDB state fund.
However, Malaysia’s finance ministry did not specify AMMB’s wrongdoing in the case, in its statement released on Friday.