Say No To Hudud

Monday, April 4, 2011

Did PwC cook the Maxis books?

The answer is obviously, no. But, the answer is no, not because of PwC itself, but because of Tan Sri Ananda Krishnan.

That Tan Sri Ananda Krishnan is a man that brooks no nonsense, is not something that the shareholders of Maxis can doubt. But Maxis still has to do the right thing, which is choose between two simple options to assuage any doubts that play in the minds of the shareholders, so long as PwC remain as the external auditors for Maxis.

The easiest option will be of course to change the external auditors. Drop PwC and pick any of the other firms, where the senior partners have not been tainted with questions of fraudulent conduct.

The other option is for Maxis to get the senior partners of PwC to explain away the allegations of fraud against them.

The MD of PwC, Mr.Chin Kwai Fatt, must be asked to give an explanation why he decided, together with Dato' Johan Raslan and Lee Tuck Heng to remain as Directors and shareholders of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), when the company was supposed to have been sold off to IBM Corp in 2002 as part of the global sale of the consulting business of PwC to IBM Corp.

Chin Kwai Fatt & Co must also explain why they decided to hide several hundred million Ringgit worth of contingent liabilities in PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), even though the sale of the consulting business to IBM Corp was to include ALL assets, liabilities and going concerns.

Chin Kwai Fatt & Co must also explain the rationale behind the renaming of PricewaterhouseCoopers Consulting (East Asia) Sdn Bhd as PwC Consulting Malaysia Sdn Bhd, and appointing two individuals known as Foong Weng Chee and Chu Kum Yoon, who have never been involved in the PwC consulting business as its directors, prior to disposing off the renamed company to IBM Corp as the legitimate consulting arm of PwC in Malaysia.

Chin Kwai Fatt must then explain to the Maxis shareholders why they should not view him with suspicion and distaste when he had signed a false declaration in 2008, that PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) can meet its liabilities as and when they may fall due despite the following:
  1. he did not disclose the several hundred million Ringgit in contingent liabilities in the company
  2. he neglected to ensure that the company could meet the cash flow solvency as well as the balance sheet solvency tests to ensure that his statement was valid
  3. that he signed this false statement despite the sworn statement by Dato Johan Raslan which stated that the Court of Appeal finds that the claims made against PricewaterhouseCoopers Consulting Sdn Bhd (464379-U) could not be said to be manifestly unsustainable.
  4. that he was also aware that the former Chairman of PwC, Raja Tan Sri Dato' Seri Arshad, had signed a sworn statement that PricewaterhouseCoopers Consulting Sdn Bhd (464379-U0 was a member firm of the global organisation of PwC
  5. that he signed this false statement without disclosing the contingent liabilities even though the company had not made any attempt to strike out the various lawsuits against it.
Chin Kwai Fatt must then get Khoo Chuan Keat to answer the 5 points raised above for signing a similar false declaration in the annual returns for PricewaterhouseCoopers Consulting Sdn Bhd (464379-U0 in 2009!

After answering all the above, Chin Kwai Fatt & Co must then explain to the shareholders of Maxis why they have chosen to use the services of a  tainted auditor, namely Roger Yue, Tan and Associates to audit the books for PricewaterhouseCoopers Consulting Sdn Bhd (464379-U)

The shareholders of Maxis will not interrupt the AGM for Maxis this year with the many disturbing questions raised above, but, Maxis must do the right thing. Drop PwC as the external auditors, or get its senior partners to answer the allegations. Pure and simple.

Maxis must assuage the disgust the shareholders feel while Chin Kwai Fatt & Co are allowed to audit the books for Maxis,  even though they have not answered a single one of the many allegations against their conduct.

The answers must be obtained from PwC, even if the regulators and other bodies are unable to do it.

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