Say No To Hudud

Friday, December 31, 2010

Part 2 - PwC is hiding fraud, here is the evidence!

On the 2nd of May, 2009, the Business Section in The Star newspaper carried an article titled "When Speed Counts" under the byline of its Deputy Business Editor, Errol Oh. The entire article may be read here.





In part 1, we showed that  PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) is audited by Roger Yue, Tan & Associates. 

One of the shareholders cum Directors in PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) is Dato' Johan Raslan, the Executive Chairman of PwC Malaysia.

Ironically, Dato' Johan Raslan is also a member of the Securities Commission of Malaysia's Corporate Governance Consultative Committee. 

So the SC charges an auditor in court for abetting a client in submitting false information , but at the same time, a member of the SC's Corporate Governance Committee is using the very same auditor for a company, PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), in which he is a Director/shareholder. A company whose very existence is fraudulent. 

The high profile Enron and WorldCom financial scandals saw the enactment of the Sarbanes-Oxley Act of 2002 in the USA, in order to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise.

Sarbanes–Oxley contains 11 titles that describe specific mandates and requirements for financial reporting. Each title consists of several sections, summarized below.
  1. Public Company Accounting Oversight Board (PCAOB)
    Title I consists of nine sections and establishes the Public Company Accounting Oversight Board, to provide independent oversight of public accounting firms providing audit services ("auditors"). It also creates a central oversight board tasked with registering auditors, defining the specific processes and procedures for compliance audits, inspecting and policing conduct and quality control, and enforcing compliance with the specific mandates of SOX.





Point 2 is Auditor Independence. Three is Corporate ResponsibilityAnalyst Conflicts of InterestWhite Collar Crime Penalty Enhancement and Corporate and Criminal Fraud Accountability are among the other areas covered in the SOX, as it is also called. (from Wikipedia)

We will leave things at that for now.

Wishing everyone a Very Happy New Year, and rest assured that we will be back in January 2011 with more revelations, for a better Malaysia.


How much longer are PwC's Global Leaders going to remain silent on the ongoing PwC fraud?

This question is respectfully addressed to Mr Paul Boorman, the Global Leader - Operations, who oversees the PwC global operational network, and to Dr Coenraad Van Beek, the Global Leader for Ethics and Business Conduct in PricewaterhouseCoopers.

Mr Paul Boorman, Global Leader - Operations for  PricewaterhouseCoopers

Dr Coenraad Van Beek, Global Leader for Ethics and Business Conduct in PwC




Gentlemen, Malaysia, together with many other countries hit by the 1997 Asian Crisis, became committed to a rapid transformation of the corporate governance system after the crisis highlighted the inherent weaknesses in the previous corporate governance framework. With the entire world flirting on and off with a continuous crisis situation now, no country, including Malaysia, will expect to repeat the mistakes of the past.

We ask that PwC treats any questions regarding the propriety of  PwC Malaysia's conduct, as a whole or in part, with the same seriousness you would give to the conduct of your office in a larger market, especially considering that PwC Malaysia is responsible for the audits of more than a hundred of Malaysia's public listed companies, and is, in fact, the largest auditing firm in the country.

PricewaterhouseCoopers LLP sold its global management consulting and technology services business to IBM Corp back in 2002.

Part of the condition given by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) for the sale to IBM Corp, in the no-action letter from the Office of the Chief Accountant , says that failure to comply with any of the terms, representations or conditions enumerated in the letter will vitiate the no-action position.


The sale was for all ongoing businesses, assets and liabilities in PwC's Management Consulting and Technology Services Business worldwide, lock, stock and barrel, to IBM Corp. In Malaysia this should include PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), but that did not happen.


Instead, a company called PricewaterhouseCoopers Consulting (East Asia) Sdn Bhd, which was renamed as PwC Consulting Malaysia Sdn Bhd (289801-A) on 20-11-2001, was disposed off to IBM Corp as part of the sale. 


This act included the appointment as Directors of a Mr Foong Weng Chee, who was running his own accounting firm, Foong Weng Chee & Co, at the time of his appointment as Director in the renamed PwC Consulting Malaysia Sdn Bhd, and has never been involved in PwC's Consulting business, as well as the  appointment of a Ms Chu Kum Yoon who was a Company Secretary at the material time of her appointment in the same company. She has also never been involved in the consulting business of  PricewaterhouseCoopers in Malaysia. You can read the entire argument here, on the appointment of 'sham' Directors.


Subsequent to that, PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) has remained under a quartet of Senior Partners of PwC Malaysia, namely, the Executive Chairman of PwC Malaysia, Dato Johan Raslan, The MD of PwC Malaysia, Mr Chin Kwai Fatt, the Tax Partner of PwC Malaysia, Mr Koo Chuan Keat , and Senior Partner in PwC Malaysia, Mr Lee Tuck Heng as the Directors, Secretary and/or shareholders till today.


This is in clear violation of the no-action letter from the SEC. 


So, is the sale process that began in 2002 complete yet, seeing that PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) still exists, and if the sale is still technically incomplete, will this not make all the global audits of IBM Corp for the past 8 years suspect or invalid, if not downright illegal, as it establishes a direct financial interest between the auditor (PwC) and the client(IBM)?


And what about the audits of IBM in Malaysia by PwC?


And since it is still ongoing, more than 8 years after the sale, it has basically made point no. 9 in the no-action letter moot. 


The conditions described in your letter include, among other things, that

9) indemnification claims for certain losses must be made by IBM within two years of the closing and the aggregate amount of such claims may not exceed 12.5% of the purchase price; 

PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) remains in existence to hide contingent liabilities to the tune of several hundred million Ringgit. To add insult to injury, PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) is also using tainted auditors to audit its books. You can read about it here

Why would the premier auditing company in the country, and one of the big 4 worldwide, use the services of any auditor that is tainted with impropriety for any of its own companies? In this case, a company that is hiding  millions in contingent liabilities, and should have been part of a headline grabbing sale 8 years ago?

With all humility, we ask that efforts be taken by the global office to dissolve PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) by the end of February 2011, as there is no rational explanation for its continued existence except to defraud creditors by hiding its contingent liabilities. This is inexcusable for any entity, and doubly so for an auditing firm of PwC's repute.







Wednesday, December 29, 2010

PwC is hiding fraud, here is the evidence!


On the 28th of April 2009, the Securities Commission charged the engagement partner of Roger Yue, Tan & Associates for abetting a listed company in submitting false information (inflated earnings) to Bursa Malaysia.



Charged for abetting a listed company in submitting false information to Bursa Malaysia

Who will hire an Auditing firm known and charged for releasing false information, in this case inflated earnings(something Enron was famous for), a tainted firm, as their own Auditors? 

This is who, Chin Kwai Fatt & Co, a gallery of 'rogues' in PwC!

1. Mr Chin Kwai Fatt, the Managing Director of PricewaterhouseCoopers Malaysia, the largest auditing firm in this country. Mr Chin is the man who controls PwC Malaysia. Mr Chin, who went to Tan Sri Zarinah Anwar's, the Chairman of the Securities Commission, home for dinner, and got his man appointed as the Director of the Audit Oversight Board, is also very close to the firm of Roger Yue, Tan & Associates.

Mr Chin Kwai Fatt, MD of PwC Malaysia.


2. Dato' Johan Raslan, the Executive Chairman of PricewaterhouseCoopers Malaysia. A man who follows what Mr Chin Kwai Fatt asks of him.


Dato' Johan Raslan, Executive Chairman of PwC Malaysia

3. Mr Lee Tuck Heng, Senior Partner in PricewaterhouseCoopers Malaysia.


Mr Lee Tuck Heng, seated third from left.

4. Mr Khoo Chuan Keat, Tax Leader and Senior Executive Director in PricewaterhouseCoopers Malaysia.

Mr Khoo Chuan Keat, Tax Leader and Senior Executive Director in PwC Malaysia

Roger Yue, Tan & Associates are the auditors for PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), the company which is under the directorship of  Mr Chin Kwai Fatt, Dato' Johan Raslan, Mr Lee Tuck Heng and Mr Khoo Chuan Keat as the Secretary.



PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), whose Directors are Mr Chin Kwai Fatt, Dato Johan Raslan and Mr Lee Tuck Heng, with Mr Khoo Chuan Keat as its Secretary, are using a tainted firm as their own Auditors.



The Shareholders for PricewaterhouseCoopers Consulting Sdn Bhd are Dato' Johan Raslan and Mr Lee Tuck Heng, with Mr Khoo Chuan Keat signing off as the Secretary.

Why would the largest Auditing Firm in the country, PwC Malaysia, which does the audits for more than a hundred public listed companies and many important corporations, have Senior Partners, Chin Kwai Fatt & Co, who use the services of an auditor who has been charged by the SC for clear cut fraud, as their own Auditors.?

Wouldn't it be expected that the biggest auditing firm in the country will only use the auditing services of untainted auditors for any and all of their businesses? Unless....there is something that they need hidden perhaps?

There is an ongoing fraud perpetrated by PwC in Malaysia with regards to the non disposal of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) to IBM Corp, when PricewaterhouseCoopers LLP sold its global management consulting and technology services business to IBM Corp back in 2002.

The sale of the Consulting Business to IBM Corp was a lock, stock and barrel deal, which meant that all ongoing businesses, assets and liabilities were sold to IBM Corp for USD$ 3.5 billion in 2002.

In Malaysia though, PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), was not disposed off to IBM, and still remains in existence to hide contingent liabilities to the tune of several hundred million Ringgit. You can read more about this ongoing fraud by PwC Malaysia here.

Under the directorship of this four senior partners, Chin Kwai Fatt & Co,  PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), has remained unmolested and happily hiding all these liabilities for more than 8 years. But the Directors would not be able to use the services of any normal, upright and honest Auditors would they? Chin Kwai fatt & Co will need the help of someone that will be willing to help them perpetrate this ongoing fraud, defrauding creditors and all, and that is exactly what they have done.

The firm was charged with offences related to inflated profits, and they are now helping you hide your liabilities. Why would the four of you, Chin & Co,  use tainted auditors, for goodness sake?

The only reason you are using this tainted auditors is to cover up your fraudulent acts.

We have further irrefutable evidence of fraud by Chin Kwai Fatt & Co. We will release the evidence bit by bit over time.

Mr Chin Kwai Fatt, we give you until the end of February to dissolve PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) and for once and for all, put a stop to this continuing fraud.




 

Tuesday, December 28, 2010

PwC and Twitter

The Chairman of PricewaterhouseCoopers in Malaysia, Dato' Johan Raslan exposes himself as a hypocrite on his Twitter page.




Albert Einstein, the great Swiss genius believed strongly in absolute standards of right and wrong.

When the public perception at his time began to confuse his groundbreaking work on the relativity of time and motion with relativity in morality, he was unequivocal in his response.

Einstein said,“Relativity applies to physics, not ethics.....The meaning of relativity has been widely misunderstood. Philosophers play with the word, like a child with a doll. . . . It does not mean that everything in life is relative.” The great man was very unhappy that his works in the objective world of science were being dragged into the subjective inner world of human morality, attempting to show that there can be an absence of absolutes in the moral sphere.

Will the great man be happy to see his words now being tweeted by Johan Raslan, when Johan has failed miserably in upholding what is right in corporate governance, in due respect for the process of law, in allowing and even participating in actions that are fraudulent? In what way have PwC Malaysia and Johan Raslan shown that they believe that there are no excuses for breaking the rules and that no compromises can be made in ethics?

Do you consider the appointment of Mr Manohar Benjamin Johnson, from being an Executive Director in PwC Malaysia to that of Director of the Audit Oversight Board under the Securities Commission, allowing him to regulate the very firm he worked for, an example of absolute impartiality? Is there absolutely no room for conflict of interest there?

Do you consider the registration of your firm, PricewaterhouseCoopers Malaysia, by the very same Audit Oversight Board, as Auditors on the very same day the Board members were themselves appointed, on its very first day of operations,  before even the legislation to collect the fees and its mechanism had been approved, under very questionable circumstances, being both physically and legally impossible, an example of an act of total lawfullness, of total integrity, of complete and utter uprightness?

Do you consider the act of appointing Ms Chu Kum Yoon and Mr Foong Weng Chee as Directors in your "consulting arm" PwC Consulting Malaysia Sdn Bhd (289801-A) as part of the sale to IBM Corp, an act of total rectitude? Is your position as shareholder and Director in PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), where hundreds of millions of Ringgit in contingent liabilities is being kept, to effectively defraud creditors, an act of total and complete legality, devoid of any and all elements of fraud?

Are your continuing audits, of not only IBM in Malaysia, but many other listed entities, while PwC Malaysia cannot even defend its own registration by the oversight board, and example of acts that are rule-governed and completely licit?

Dato' Johan Raslan have you wondered, if your actions and those of PwC in Malaysia so far, can even comply with PricewaterhouseCoopers's very own Code of Conduct?

1. Is it against PwC or professional standards?
2. Does it feel right?
3. Is it legal?
4. Will it reflect negatively on you or PwC?
5. Who else could be affected by this (others in PwC, clients,
you, etc.)?
6. Would you be embarrassed if others knew you took this
course of action?
7. Is there an alternative action that does not pose an
ethical conflict?
8. How would it look in the newspapers?
9. What would a reasonable person think?
10. Can you sleep at night?

How much longer can you keep silent on the many questions raised here? We know you refused to take any calls the entire day when this article about your ambition to be the next Chairman of the Securities Commission appeared in RPK's MalaysiaToday, but shouldn't you have some answers by now?

We believe that the spirit of Albert Einstein has been disturbed enough by your tweet already, so we will not quote him to end this piece, but use the words of another great man, Albert Camus.

"A man without ethics is a wild beast loosed upon this world".

Dato Johan Raslan and Mr Chin Kwai Fatt in happier times

We now ask Mr Coenie Van Beek, the Global Leader for Ethics and Business Conduct in PwC, a few questions.

1. Have you lost control over the ethical and business conduct of PwC Malaysia and its senior partners?

2. Why is the ongoing fraud perpetrated by PwC in Malaysia with regards to the non disposal of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) to IBM Corp, when PricewaterhouseCoopers LLP sold its global management consulting and technology services business to IBM Corp back in 2002, still left unquestioned after more than 8 years?

3. Why are PwC in Malaysia continued to allow to audit IBM in Malaysia when all of this remains unresolved?

4. What are the implications on the global audits done by PwC for IBM Corp?

5. How much longer will it take for the silence to be broken, and action to be taken?

Dr Coenie Van Beek, Clobal Leader for Ethics and Business Conduct for PwC

Monday, December 27, 2010

The other two 'rogue' Senior Partners in PwC Malaysia

Apart from the MD of PwC Malaysia, Mr Chin Kwai Fatt, the man who is the real power there, and Dato' Johan Raslan, the Executive Chairman of PwC Malaysia, who follows what Mr Chin says, there are two more senior partners, Mr Lee Tuck Heng and Mr Khoo Chuan Keat, who are parties to the ongoing fraud perpetrated by PwC in Malaysia with regards to the non disposal of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) to IBM Corp, when PricewaterhouseCoopers LLP sold its global management consulting and technology services business to IBM Corp back in 2002.

Mr Khoo Chuan Keat, as the Tax Leader and Senior Executive Director in PricewaterhouseCoopers Malaysia, leads a team of 30 tax partners and 280 other fee earners. In fact PricewaterhouseCoopers won the Tax Firm of the Year Award for Malaysia, awarded by the International Tax Review recently.

Mr Khoo Chuan Keat

So what is Mr Khoo Chuan Keat's role in the ongoing PwC fraud? He is the Company Secretary for PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), the company which remains in existence and hides several hundred millions of Ringgit of contingent liabilities from the sale of PwC's consulting services to IBM Corp back in 2002, while defrauding creditors, as how can a dormant company meet its contingent liabilities when it no longer generates revenues?
PricewaterhouseCoopers Consulting Sdn Bhd (464379-U): Dormant, generates no revenues, but has several hundred million Ringgit in contingent liabilities.




Mr Lee Tuck Heng, seated third from left, talking to Mr Goh Ching Yin, who sits in the Audit Oversight Board and is an Executive Director in the Securities Commission, and another Director from PwC Malaysia.

The other 'rogue' Senior Partner in PwC Malaysia is Mr Lee Tuck Heng, who is not only a Director in  PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), but also one of its two shareholders together with Dato' Johan Raslan.

In the picture above, Mr Lee Tuck Heng is seen in conversation with a member of the Audit Oversight Board, and Execurive Director in the Securities Commission, Mr Goh Ching Yin.

The facts in the questionable registration of PwC Malaysia, a registration that is both a legal and a physical impossibility,  by the Audit Oversight Board, which is run by one of PwC Malaysia's former Directors, Mr Manohar Benjamin Johnson, can be read here.

We now ask Mr Coenie Van Beek, the Global Leader for Ethics and Business Conduct in PwC, a few questions.

1. Have you lost control over the ethical and business conduct of PwC Malaysia and its senior partners?

2. Why is the ongoing fraud perpetrated by PwC in Malaysia with regards to the non disposal of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) to IBM Corp, when PricewaterhouseCoopers LLP sold its global management consulting and technology services business to IBM Corp back in 2002, still left unquestioned after more than 8 years?

3. Why are PwC in Malaysia continued to allow to audit IBM in Malaysia when all of this remains unresolved?

4. What are the implications on the global audits done by PwC for IBM Corp?

5. How much longer will it take for the silence to be broken, and action to be taken?

Dr Coenie Van Beek, Global Leader for Ethics and Business Conduct in PricewaterhouseCoopers




Saturday, December 25, 2010

PwC Malaysia appointed 'Sham Directors'

PricewaterhouseCoopers in Malaysia appointed sham Directors in 2002 and 2003 as part of a sale to IBM Corporation of their consulting business, a sale that is still incomplete, making their position as Auditors of IBM in Malaysia fraudulent. 

On the 1st of August, 2002, Business Times in Malaysia carried an article headed 'IBM buying PwC Consulting"


Business Times (Malaysia)

By Fazli Ibrahim
Date: Thursday, August 1 2002


COMPUTER and services giant International Business Machines (IBM) is
acquiring the consulting and technology services arm of accounting firm
PricewaterhouseCoopers (PwC) for US$3.5 billion (US$1 = RM3.80) in cash
and shares. 
IBM Global Services general manager for Asia Pacific Timothy
Shaughnessy told Business Times that PwC Consulting will be integrated
into IBM Global Services as a single unit by the end of September once
the acquisition is completed. 


Announcing the completion of the sale on the 2nd of October, 2002:

"Samuel A. DiPiazza, Jr., chief executive officer of PricewaterhouseCoopers, said, "With the closing of this sale, PricewaterhouseCoopers effectively completes the reorganization we began more than two years ago, and fulfills our commitment to unleash the consulting unit from the regulatory restraints of our industry. Combining PwC Consulting with IBM fully achieves the goals we set for the separation and it provides clients and our professionals with greater opportunities and access to innovative solutions. We wish our former colleagues all the best."


Prior to these announcements, steps were taken to "fulfill" the Malaysian part of the global sale by PricewaterhouseCoopers Malaysia.

PricewaterhouseCoopers Consulting (East Asia) Sdn Bhd was renamed as PwC Consulting Malaysia Sdn Bhd (289801-A) on 20-11-2001, to be disposed off to IBM Corp. This happened while the real consulting arm of PwC in Malaysia, PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), still remains under the ownership of the current Directors of PwC Malaysia.

Ms Chu Kum Yoon, a Company Secretary, was appointed a a Director in PwC Consulting Malaysia Sdn Bhd (289801-A).

Ms Chu Kum Yoon, has never played a role in the Consulting business of PwC. Her appointment, and that of Mr Foong Weng Chee were sham appointments.

Here is an AGM for Matsushita Berhad that she signed off on at that time.


As for Mr Foong Weng Chee, he was at that time, and still is, running his own accounting firm, Foong Weng Chee & Co.




The sale of the consulting business to IBM Corp., was to include all ongoing businesses, assets and liabilities. But in Malaysia, what has happened is that the ongoing businesses at that time, as well as the assets were sold as part of the company renamed as PwC Consulting Malaysia Sdn Bhd (289801-A), under sham Directors, while the contingent liabilities to the tune of several hundred million Ringgit were kept hidden in the real company that handled the consulting business, PricewaterhouseCoopers Consulting Sdn Bhd (464379-U).

PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), is a company that still exists, and has the Executive Director of PwC Malaysia, Dato Johan Raslan, The MD of PwC Malaysia, Mr Chin Kwai Fatt, the Tax Partner of PwC Malaysia, Mr Koo Chuan Keat , and Senior Partner in PwC Malaysia, Mr Lee Tuck Heng as the Directors and/or shareholders till today.

How do you sell a company, but keep the contingent liabilities hidden and away from the sale? You cannot, so you sell another entity, with sham Directors, with the 'good parts' and keep the original entity parked away carrying all the contingent liabilities, and go on with business. It makes the sale incomplete, breaks the criteria set by regulators (SEC), defrauds creditors, and makes the audits done on the Buyer, IBM in Malaysia as well as globally, fraudulent, but no one will know right?

Wrong. Sooner or later, a grassroot movement like this will come along and keep shouting from the rooftops, like a good movement should.

What is Dr Coenie Van Beek, the Global Leader for Ethics and Business Conduct in PricewaterhouseCoopers going to do about this? And how long is it going to take for the good Doctor to do something?




Wednesday, December 22, 2010

Mr. A, the 'Deep-throat' in PwC

Ten years ago, Mr Chin Kwai Fatt became the MD of PricewaterhouseCoopers in Malaysia.

Mr Chin narrowly defeated Mr A, his fellow senior partner, who was actually the favourite for the position of Managing Director.

Mr A, who was happy to see this blog, has kindly supplied us with a substantial amount of information here, including the information in the post on Genting insiders reconsidering PwC as their auditors, now wants us to 'slow down' as it is becoming too hot for him.

Mr A and his team want the removal of both Dato Johan Raslan and Mr Chin Kwai Fatt from power in PwC. And we believe that Mr A will benefit if Johan and Chin were to resign.

According to Mr A, Dato' Johan Raslan reluctantly became a shareholder and a Director in PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), the undissolved consulting arm of PwC, as part of the deal to become Executive Chairman of PwC Malaysia. He knew this was fraudulent, but had no choice but to play a role in the actions to hide the contingent liabilities in what is now a dormant company, if he wanted to be appointed as the Executive Chairman.

According to Mr A, Johan Raslan is also sometimes referred to as a 'pak turut' and follows whatever Mr Chin Kwai Fatt says. The real kingmaker and puppetmaster in PwC is Mr Chin Kwai Fatt, and Dato' Johan Raslan is little more than a figurehead, with no real clout amongst the senior partners in PwC.

Mr A is now scared enough that he has asked us to stop, but we will not stop.

As we see it, we have reduced the chances of seeing a 'pak turut' being appointed as the Chairman of the Securities Commission, and also the chances of Mr Chin Kwai Fatt  becoming the king maker in the SC, which basically would have meant that the entire corporate regulatory and enforcement in this country will be in the hands of the same person that runs the biggest auditing firm in the country.

But our job is not done yet Mr A, "alang-alang menyeluk pekasam, biar sampai ke pangkal lengan", Mr A.

Is it a fair request to ask us to stop or slow down, Mr A?  The accounting fraud is still ongoing, the illegal registration of PwC by the AOB is still standing, and how are we to clean anything up if the regulatory body itself has been compromised?


"Genggam bara api sampai jadi arang". 

Tuesday, December 21, 2010

Part 2 - Both BN and Pakatan are "sleeping at the switch" - major regulatory scandal and accounting fraud by PwC goes unanswered.

Singapore is ranked no.2 globally in protection of investors interests and no.1 among 10 Asian countries. Have they had cases of accounting fraud? Yes,and they were swift and decisive in their actions to root out the culprits.

If we compare the non-action of our authorities with what would have happened if this was a case in Singapore or Australia, we see how far we are getting left behind by our compatriots in terms of governance, accountability and enforcement.

We will now spell out the details of just one of the accounting frauds by PwC in Malaysia here, with regards to the sale of PwC Consulting, the worldwide consulting arm of PricewaterhouseCoopers LLP to IBM Corp for US$3.5 billion in October of 2002.

In Malaysia, the sale of the consulting arm is a 'sham sale', for the following reasons:

1. The renaming of PricewaterhouseCoopers Consulting (East Asia) Sdn Bhd, as PwC Consulting Malaysia Sdn Bhd (289801-A) on 20-11-2001, to be disposed off to IBM Corp.,  while the real consulting arm of PwC in Malaysia, PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), still remains under the ownership of the current Directors of PwC Malaysia.

Sham Company?



2. The sham appointment of a Mr Foong Weng Chee, who was running his own accounting firm, Foong Weng Chee & Co, at the time of his appointment as Director in the renamed PwC Consulting Malaysia Sdn Bhd, and has never been involved in PwC's Consulting business. The sham appointment of a Ms Chu Kum Yoon who was a Company Secretary at the material time of her appointment in the same sham company. She has also never been involved in the consulting business of  PricewaterhouseCoopers in Malaysia. 

Sham Directors?


3 The fact that the Executive Director of PwC Malaysia, Dato Johan Raslan, The MD of PwC Malaysia, Mr Chin Kwai Fatt, the Tax Partner of PwC Malaysia, Mr Koo Chuan Keat  (winning the tax firm of the year award), and Senior Partner in PwC Malaysia, Mr Lee Tuck Heng remain as the Directors and/or shareholders in  PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), the company that was actually supposed to be sold to IBM Corp in the 2002 sale.

PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) is company that still carries contingent liabilities to the tune of several hundred million Ringgit, and this entire process was done to defraud its creditors

One of the conditions under the no-action letter issued by the SEC for the sale in 2002 is as follows:

The conditions described in your letter include, among other things, that

9) indemnification claims for certain losses must be made by IBM within two years of the closing and the aggregate amount of such claims may not exceed 12.5% of the purchase price; 

Not only has this sham sale been left unchecked past the indemnity period, the amount of contingent liabilities left 'parked' there is also a significant percentage of the original sale price. And the creditors are still being defrauded with no one, we repeat, no one in the authorities who are willing to question this accounting fraud.

The only remedy is the immediate dissolution of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U).

In light of PwC's fraudulent misconduct that has been exposed, will CIMB still have the stomach to retain them as auditors?







Sunday, December 19, 2010

Both BN and Pakatan are "sleeping at the switch"- major regulatory scandal and accounting fraud goes unanswered.

On May 11, 1998, the world was taken completely by surprise when the government of India conducted three successful nuclear weapons tests. The CIA didn't even know that India was working on a nuclear weapon until somebody at Langley said; ‘What was that noise?’

The Congress was furious. Senate Foreign Relations Committee Chairman Jesse Helms summed up the mood saying for the record; ‘I am astonished that the Indian government was able to catch the U.S. intelligence capability so sound asleep at the switch.’

Dato' Seri Haji Ahmad Husni Bin Mohamad Hanadzlah, on the 13th of April 2010, you signed and approved the Securities Commission (Audit Oversight Board) (Fees) Regulations 2010 as the Second Finance Minister. The regulations were to come into force on the 15th of April, and was also signed by Tan Sri Zarinah Anwar as the Chairman of the Securities Commission on the 8th of April 2010.  


Despite the fact that the regulations cannot be enforced without your approval and signature, the Audit Oversight Board went ahead and registered the accounting firm of PricewaterhouseCoopers on the 1st of April 2010. You can read more about the regulatory scandal here


Dato' Seri Haji Ahmad Husni, we ask you what is the value in your signature as the Second Finance Minister, if this can happen with total and utter disregard to the laws and regulations of the country; the very same regulations you had approved?


Dato' Seri Haji Ahmad Husni, now that you must be aware of what has been happening, we ask you what you are going to do about the regulatory scandal involving the SC, the AOB and the accounting firm of PwC?


If it is not bad enough that we have BN caught sleeping at the switch, we find that Pakatan Rakyat is also guilty of the same.


Dato' Seri Anwar Ibrahim, as the Ketua Pembangkang, with a total of 77 Members of Parliament, are we to accept that not a single one of Pakatan's MP's are aware of the regulatory scandal and accounting fraud by PwC that we have been continuously writing about here?


RPK's Malaysia Today, together with a few other seasoned bloggers have been carrying the posts  herehereherehere and here. Are we to believe that not a single one of the 77 MP's in Pakatan has read the postings in Malaysia Today until today?


Not only is there evidence of the biggest regulatory scandal this country has seen this year, there is also a major accounting fraud perpetrated by the firm of PricewaterhouseCoopers with regards to IBM in Malaysia to be answered.


The entire framework of Corporate Governance in this country is now suspect because of the regulatory scandal involving the SC, AOB and the firm of PwC, and the implications are so extensive, with such far reaching ramifications that it begs disbelief that not a single one of Pakatan's 77 MP's has seen it fit to ask questions of those involved.


The firm of PricewaterhouseCoopers does the audits for more than one hundred public listed companies in Bursa Malaysia. Are the taxpayers, shareholders and the Malaysian public in general expected to accept that everything is fine despite all the evidence to the contrary?


Is this not as important as APCO, if not more important to investor confidence, transparency and economic robustness of the country? Will this not have an impact on hundreds of billions of the rakyat's money placed in public listed companies by the EPF?


The regulatory scandal means that we have failed in our goal of achieving proper corporate governance as soon as we left the gates. How can the people be expected to accept the soundness of the regulatory process when even the Audit Oversight Board has been subject to such blatant disregard towards its own rules and regulations?


The accounting fraud by PricewaterhouseCoopers has been ongoing for more than 8 years now. The regulatory scandal has been allowed to remain unanswered for nearly 7 months now. How much longer will we have to wait to see a single MP from Pakatan raise this questions on behalf of the people?





Saturday, December 18, 2010

Global Leader for Ethics and Business Conduct in PwC finds himself in a tight spot because of ongoing PwC Malaysia fraud.

Coenraad Van Beek, better known as Coenie Van Beek, is the Global Leader for Ethics and Business Conduct at PricewaterhouseCoopers.


Coeni Van Beek


As the Global Leader for Ethics, how long have you known about the continuing fraud perpetrated by PwC in Malaysia with regards to the non disposal of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) to IBM Corp, when PricewaterhouseCoopers LLP sold its global management consulting and technology services business to IBM Corp back in 2002.

This has been ongoing for more than 8 years now, and it begs disbelief that no one has raised any questions on this fraudulent act, especially when it contravenes the no-action letter released by the SEC with regards to the sale.

1. Does this not impact the global audits done by PwC for its client, IBM Corp? And what about the audits of IBM in Malaysia by PwC?


Mr Chin Kwai Fatt and Datuk Johan Raslan of PwC Malaysia in happier days

2. How is it that Mr Chin Kwai Fatt, the MD of PwC Malaysia is a Director in PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) till today? Who allowed Malaysia to be the exception to the global sale of PwC consulting business to IBM?

3. How is it that Ahmad Johan bin Mohammad Raslan and Lee Tuck Heng remain as shareholders of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U),which should be under the Global Business Services division of IBM, when PricewaterhouseCoopers is the Auditor for IBM Malaysia Sdn Bhd?



4. PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) is being used to hide hundreds of millions of dollars worth of contingent liabilities, pure and simple. The global audit on IBM Corp is worth hundreds of millions of dollars in fees as well, but doesn't this sleight of hand negate the audit, as it establishes a direct financial interest between the auditor and the client?

5. How is the renaming of PricewaterhouseCoopers Consulting (East Asia) Sdn Bhd, to PwC Consulting Sdn Bhd (289801-A), and its subsequent sale to IBM valid, when the contingent liabilities were kept hidden in the real consulting arm of PwC in Malaysia, namely PricewaterhouseCoopers Consulting Sdn Bhd (464379-U)?

6. Is the sale process that began in 2002 complete yet, seeing that PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) still exists, and if the sale is still technically incomplete, will this not make all the global audits of IBM Corp for the past 8 years suspect or invalid, if not downright illegal?

7. How is it that Mr Foong Weng Chee is named as a Director in PwC Consulting Sdn Bhd (289801-A), when he has his own accounting firm called Foong Weng Chee & Co, and has been running it since before 2002? What exactly was sold to IBM in Malaysia, when PricewaterhouseCoopers LLP sold its global management consulting and technology services business to IBM Corp back in 2002?




8. How long will it take for the Global Ethics and Business Conduct office to dissolve PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), as there is no way this entity can be allowed to exist in any way, shape or form? One week? Two weeks?

9. Doing the right thing, the PwC way? This if from the very code of conduct for which you are the global leader.

Those who violate the Code or PwC policies and procedures
will be subject to disciplinary action, up to and including
dismissal. Disciplinary measures will also apply to anyone
who directs or approves infractions or has knowledge
of them and does not promptly move to correct them.

9.1. Is it against PwC or professional standards?
9.2. Does it feel right?
9.3. Is it legal?
9.4. Will it reflect negatively on you or PwC?
9.5. Who else could be affected by this (others in PwC, clients,
you, etc.)?
9.6. Would you be embarrassed if others knew you took this
course of action?
9.7. Is there an alternative action that does not pose an
ethical conflict?
9.8. How would it look in the newspapers?
9.9. What would a reasonable person think?
9.10. Can you sleep at night?

10. Is there anyone working to resolve this fraud, and how much longer will it be allowed to continue, after having been hidden in plain sight for more than 8 years?





Wednesday, December 15, 2010

Audit Oversight Board (AOB) Malaysia scandal, who's responsible?

Quis custodiet ipsos custodes? Who will guard the guardians?

There are seven members of the Audit Oversight Board (AOB), appointed by the Securities Commission (SC). And this is no 'lightweight' board. These are the board members:


Nik Mohd Hasyudeen Yusoff, Executive Chairman of the Audit Oversight Board, who prior to joining the AOB was also vice-president of the Asean Federation of Accountants and member of CPA Australia’s Public Practice Advisory Committee, former president of the Malaysian Institute of Accountants (MIA) and had served on the Malaysian Accounting Standards Board.

Datuk Ali Abdul Kadir, Chairman of the Financial Reporting Foundation.

Dato' Azmi Ariffin, Chief Executive Officer of the Companies Commission Malaysia.

Goh Ching Yin, Executive Director of the Securities Commission Malaysia.

Nor Shamsiah Mohd Yunus, Deputy Governor of the Central Bank of Malaysia.

Cheong Kee Fong, Advocate and Solicitor of Cheong Kee Fong & Co.

Chok Kwee Bee, Managing Director of Teak Capital Sdn Bhd.

Ladies and gentlemen, your appointment was announced on the 1st of April 2010, effective immediately from that date, by the SC. (The Star, Friday April 2, 2010)

We now ask you a series of questions with regards to what transpired under your watch on the 1st of April 2010.

1. How was the firm of PricewaterhouseCoopers (PwC) and Mr Cho Choo Meng of that same firm, registered by the AOB on the 1st of April, under Section 31s (1) SCA,when the board members themselves were only appointed on that very same day?



2. Who signed the Letter of Registration for the firm of PwC and Mr Cho Choo Meng on the 1st of April?

3. Was it the newly appointed board members?

4. Was it Tan Sri Zarinah Anwar, Chairman of the SC?

5. Or was it Mr Manohar Benjamin Johnson, Director of the AOB?

6. Who received the fees necessary for the registration of PwC and Mr Cho Choo Meng?

7.How did this staff member receive the monies on the 1st of April when the legislation to collect the fees was not in place until much later on the 15th of April 2010?

8. What mechanism was there to receive and process any applications when the Chairman herself, Tan Sri Zarinah only signed the amendment on the 8th of April, and the 2nd Minister of Finance on the 13th of April?




9. If there is an explanation for how the fees could collected and the application processed legally on that day, how did the AOB manage to check the following on the 1st of April to ascertain that the firm of PwC and Mr Cho Choo Meng met the fit and proper criteria before the registration letter was signed:


  • that they were Section 8 CA 1965 approved company auditors?
  • not undischarged bankrupts within or outside Malaysia?
  • not convicted within or outside Malaysia of any offence involving fraud or dishonesty?
  • not engaged in any practices which would reflect discredit on its/his ability to meet professional auditing standards?
  • that there were no enforcement actions, sanctions, or disciplinary actions taken by any regulatory authority within or outside Malaysia?
  • and do all the necessary background checks with all relevant regulatory authorities?
  • amongst many other checks?
10. Who were the staff or board members who were able to complete such a long list of checks before the end of day so that the Registration letter could be released?

11. Were the forms even submitted when the registration was done, as this seens a physical impossiblity?

12. Who employed Mr Manohar Benjamin Johnson as Director of the AOB?

13. Why did the board allow the employment of Mr Manohar Benjamin Johnson, who was an Executive Director with PwC, the largest audit firm in the country, as the Director of the AOB, which is as clear cut case of conflict of interest as there can be, especially in the light of the fact that the very same firm was also registered very questionably on the same day you were appointed as board members?

14. How can the 7 board members reasonably expect an ex Director of PwC to do a proper check on his former employers?

15. If you were not aware that Mr Manohar Benjamin Johnson was a former employee of PwC at the time, did you formally launch an investigation into his appointment once you became aware of the fact, to ensure that there is no conflict of interest?

16. When will Corporate Governance and transparency in Malaysia be on par with the rest of the world when even regulators like the AOB and the SC turn a blind eye towards questionable acts?

Silence is not golden, the Malaysian people deserve and demand an answer to all the questions raised above from the seven of you.

Quis custodiet ipsos custodes, when this question was answered by Plato in his work The Republic, he answered that they will guard themselves against themselves. "We must tell the guardians a "noble lie". The noble lie will assure them that they are better than those they serve and it is therefore their responsibility to guard and protect those lesser than themselves. We will instill in them a distaste for power or privilege; they will rule because they believe it right, not because they desire it."


I put it to you that there is no noble lie in this case, that there are questions you must answer as guardians of corporate governance in this country, that you must feel in you the same distaste for abuse of power and conflict of interest, that you will do what is right, that you will be true to your calling as one of the guardians for the institutions of this great country.

Tuesday, December 14, 2010

Genting Insiders dismayed by PwC fraud

Senior officials in the Genting Group are dismayed by the lack of response from PwC on the allegations of ongoing fraud by PwC in Malaysia.

Insiders say that there is a chance that PwC might be replaced as their auditors if there continues to be no official response to the allegations raised in this blog and elsewhere.

Deafening silence? Perhaps this is one of those instances when this particular oxymoron holds true.

Regardless of whether we get a response or none at all, this blog will continue to hammer away, and ask the questions that demand answers.

Sunday, December 12, 2010

Will the SC take action on this ongoing PwC fraud?

In October of 2002, IBM Corp. acquired PwC Consulting, the worldwide consulting arm of PricewaterhouseCoopers LLP for US$3.5 billion. This is an enquiry into the white collar fraud of how PwC can remain the auditors for IBM in Malaysia when they have yet to dispose of PricewaterhouseCoopers Consulting Sdn Bhd to IBM, thereby vitiating the no-action position of the Securities and Exchange Commission, among other things.


In every other country the Consulting Arm of PwC was acquired by IBM Corp as a part of their Global Business Services  division, but not in Malaysia...




This was a lock,stock and barrel acquisition, including all ongoing businesses, as well as assets and liabilities.

This is an open letter to Mr. Eric Ooi Lip Aun, Mr. Mohammad Faiz bin Mohammad Azmi and Mr Uthaya Kumar, all three gentlemen of PwC Malaysia, and CCed to Mr. Rama Nathan, the MD of IBM Malaysia.

Gentlemen, as the three of you are lobbying very hard to be the next Chairman of PwC Malaysia, we now throw down the gauntlet to you, and ask that you answer some vexing questions with regards to the misconduct of some of your fellow senior partners, as the following points will exhibit

1. In 2002 IBM Corp acquired PwC Consulting worldwide, which must include PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), the consulting arm of PricewaterhouseCoopers in Malaysia.



2. As part of the condition given by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), in the letter from the Office of the Chief Accountant , failure to comply with any of the terms, representations or conditions enumerated in the letter will vitiate this no-action position.

3.  How is it that Dato' Ahmad Johan bin Mohammad Raslan and Lee Tuck Heng remain as shareholders of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U),which should be under the Global Business Services division of IBM, when PricewaterhouseCoopers is the Auditor for IBM Malaysia Sdn Bhd?

Does this make Dato' Johan Raslan and Lee Tuck Heng de facto shareholders in IBM in Malaysia? 


4. How is it that Chin Kwai Fatt remains as a Director of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), which should be under the Global Business Services division of IBM, when PricewaterhouseCoopers is the Auditor for IBM Malaysia Sdn Bhd?

And Directors for IBM's GBS division in Malaysia?


5. How does the disposal of the company known as PricewaterhouseCoopers Consulting (East Asia) Sdn Bhd, which was renamed as PwC Consulting Malaysia Sdn Bhd (289801-A) on 20-11-2001 fulfill the terms of the global acquisition of  PricewaterhouseCoopers Consulting Sdn Bhd by IBM Corp.? And who are the persons named as the Directors, and in what way are they or have they been a part of PricewaterhouseCoopers in Malaysia?

What was sold to IBM here?

Who are these Directors, are they from PwC?


6. Mr Faiz Azmi, you are the Chairman of the Malaysian Accounting Standards Board, and will most probably be the next Chairman of PwC Malaysia, please highlight to the Malaysian people, how this will in no way turn out to be a Malaysian version of an 'Enron'esque scandal? This is a clear cut case of white collar crime.

We end with this paragraph from the PwC Code of Conduct.

Those who violate the Code or PwC policies and procedures
will be subject to disciplinary action, up to and including
dismissal. Disciplinary measures will also apply to anyone
who directs or approves infractions or has knowledge
of them and does not promptly move to correct them.

How can this be?