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.
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?|