Malaysia Targets KPMG Partners for 1MDB Damages

The Malaysian government is seeking billions of dollars in damages from KPMG partners as part of an ongoing pursuit to recover 1MDB-linked funds.

Malaysia is seeking over $5.6 billion from 44 current and former KPMG partners over alleged breaches and negligence relating to the 1MDB scandal, according to a  report citing court documents.

This is equivalent to the sum that was allegedly siphoned from 1MDB between 2009 and 2014 which the plaintiffs argue could have been flagged earlier if KPMG had conducted a proper audit.

The plaintiffs alleged that about $3.2 billion were misappropriated from 1MDB and its subsidiaries while KPMG served as an auditor which is part of the broader $5.64 billion lost in total.

They seek the full amount misappropriated including interest accrued and additional costs.

KPMG was 1MDB’s auditor until 2013 when it refused to sign off on 1MDB’s accounts and was replaced by Deloitte which subsequently paid an $80 million settlement to the Malaysian government.

KPMG denied the allegations leveled against the firm over its audit of 1MDB’s financial statement from 2010 to 2012.

All allegations as reported in the news are refuted and the claim will be vigorously contested, KPMG said, adding that it was disappointed with the lawsuit.