Say No To Hudud

Sunday, May 8, 2011

PM Najib, these are the burning questions that must be answered in Parliament.

The PAP won 75.3 percent of the votes in 2001. In 2006, its share dropped to 66.6% of the votes. Now, the support for the PAP government stands at 60.1 percent of the voting population of Singapore. 

Singapore, which has a much higher standard of Corporate Governance and better climate of investor protection than Malaysia has seen a loss of more than 15% of the votes to the opposition. Can PM Najib allow Malaysian voters to be swayed away from the BN, because the government cannot even enforce its own regulations and laws?

Burning questions that need to be answered in Parliament

The Audit Oversight Board was established under Part IIIA of the Securities Commission Act 1993, which was incorporated into the Act via the Securities Commission Amendment Act 2010, which was passed by Parliament last year.

In the amendment, it is clear that the AOB comes into force on the 1st of April 2010, and its mission will be to assist the SC in overseeing the auditors of Public Interest Entities by registering the auditors and conducting inspections and monitoring programmes to assess the extent of the compliance of the registered auditors to recognised auditing and ethical standards.

1. In the reply given in Parliament on the 29th of April 2011, the AOB stated that it was able to register the firm of PricewaterhouseCoopers and one of its directors on the 1st of April 2010, as the AOB was proactive in making the registration simpler and was satisfied that the auditing firm of PricewaterhouseCoopers met the criteria for registration under Section 31P of the SCA.

a) As the members of the Audit Oversight Board were only appointed on the 1st of April 2010, who approved the simplification of the registration process for PricewaterhouseCoopers, and why was this privilege not extended to all auditing firms in the country? On what basis was this auditing firm picked for preferential treatment?

b) As the Senior Managers for the inspection and inquiry of auditors were only appointed in the end of March 2010, who was overseeing the inspection of PricewaterhouseCoopers under Section 31P of the SCA, and what was the position(s) held by this person(s) in the AOB or the SC to allow them to make the recommendation for registration?

2. As the Act clearly states that the application for registration must be accompanied by the fees and all relevant forms and documents, and the amendment to accept the fees was only signed into force on the 15th of April 2010.

a) Who made the decision on behalf of the Audit Oversight Board to accept a 'surat aku janji' from the firm of PricewaterhouseCoopers in lieu of the fees that they needed to pay?

b) Where in the Act is it spelled out that the AOB can accept a 'surat aku janji' as an official form of payment?

c) Why are there no auditors from the major auditing firms, namely Ernst & Young, KPMG, Deloitte KassimChan or PricewaterhouseCoopers who can produce a copy of the 'surat aku janji' or even remember that they had signed a 'surat aku janji' to the AOB? Is the 'surat aku janji' a lie that is being used to cover up more serious misconducts in the AOB?

3. The Director of the AOB is a former Director of the firm of PricewaterhouseCoopers who left the firm to join the AOB. This is not an acceptable practice according to accepted world-class regulatory standards, as it raises the possibility of conflict of interest.

a) The questions raised above clearly raise the specter that the AOB has been compromised by preferential practices, which defeat the reason for the AOB in the first place. Why have the board members of the AOB not addressed this serious breach of standards?

4. The Chairman of PricewaterhouseCoopers, Dato' Seri Johan Raslan was also appointed to the International Corporate Governance Consultative Committee by the Securities Commission

a) How was this appointment approved when Dato' Seri Johan Raslan uses the services of a 'tainted auditor', Roger Yue, Tan & Associates, whose engagement partner was charged by the SC for abetting a listed company in providing false information (inflated earnings) to Bursa Malaysia; as the auditor for a company in which he is a director and the majority shareholder?

b) As the firm of PricewaterhouseCoopers does many important consulting jobs for PEMANDU, the GLC's and many other PIE's, should the AOB be allowed to give this auditing firm preferential treatment, instead of ensuring that it is subject to the same oversight standards as the smaller auditing firms in the country?

Dato Seri Johan Raslan, the Executive Chairman of PricewaterhouseCoopers Malaysia. Why is he being given preferential treatment by the Securities Commission and the AOB? Should he not have stepped down from the International Corporate Governance Consultative Committee under the Securities Commission by now, as he is the majority shareholder and director in a company that still uses the services of a tainted auditor whose engagement partner has been charged by the SC for submitting false information to Bursa Malaysia?

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