Is the PCAOB a toothless tiger? PwC Malaysia fraud and suppression of evidence goes unpunished.

Under the Sarbanes-Oxley Act, non-U.S. public accounting firms that audit or play a substantial role in the audit of U.S. issuers are subject to oversight by the PCAOB. Currently, over 900 non-U.S. audit firms from more than 85 countries have registered with the PCAOB. Under the Act and the Board's rules, non-U.S. registered firms are subject to PCAOB inspections in the same manner as U.S. firms. PricewaterhouseCoopers Malaysia is registered with the PCAOB

PwC Malaysia forced to Reveal 162 Documents that they were hiding.

Kuala Lumpur High Court Scandalised, courtesy of PwC Malaysia

James Doty, Chairman of the Public Company Accounting Oversight Board said in April that the inability to inspect auditors in China represents a “gaping hole in investor protection.” The board regulates and inspects registered auditors under the oversight of the SEC. (Copyright: Rich Clement/Bloomberg)

While Mr James Doty can lament about the inability of the PCAOB to inspect auditors in China, he should be more worried about the "gaping hole in their oversight" that allowed the PCAOB to register PwC Malaysia, even though they were aware of the fraud committed by PwC Malaysia back in 2003. 

"PricewaterhouseCoopers LLP and its Office of General Counsel were made aware of the fraud allegations against PwC Malaysia back in 2003, and that they did nothing about it.

PricewaterhouseCoopers Malaysia, together with all the other offices of PwC worldwide were supposed to allow IBM Corp to acquire their Consulting Business, as part of a global acquisition by IBM Corp of the Consulting and Technology arm of PwC.

According to the letter sent to the SEC in The United States as well the Article of Non Opposition issued by the EEC in Europe, there was no way for the Consulting arm of PricewaterhouseCoopers in Malaysia to remain exempt from the sale. And the consulting arm of PwC Malaysia was and still is PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), which till today remains under the ownership and control of the MD of PwC Malaysia, Chin Kwai Fatt; the Executive Chairman, Johan Raslan and other Senior Partners of PwC Malaysia. 

But what happened in Malaysia is an interesting sleight of hand, where a company called PricewaterhouseCoopers Consulting (East Asia) Sdn Bhd, was renamed as PwC Consulting Malaysia Sdn Bhd (289801-A) on 20-11-2001, to be sold off to IBM Corp as the 'legitimate' Consulting arm of PwC in Malaysia."

The PCAOB can obtain even further evidence of the fraud and suppression of evidence. All they need to do is to call Johan Raslan, Chin Kwai Fatt and Khoo Chuan Keat and ask the three to give copies of their affidavits opposing the application for discovery of documents by the plaintiffs in June and July of 2011, in the Kuala Lumpur High Court.

These three, Malaysia's very own version of the '3 Idiots', are directors of PricewaterhouseCoopers Consulting Sdn Bhd, and the PCAOB can read for itself how their affidavits signed in mid-2011 show clear evidence of suppression of evidence, concealment and non-disclosure, of relevant emails, working papers, business plans, valuation reports, letters and other documents. They have been trapped by the affidavit by a Miss Ho, whose affidavit signed in January 20, 2012, clearly lists all 162 documents that they have been concealing all these years.

The PCAOB can also call Sreedharan Nair and Eric Ooi, the Senior Partners of PwC Malaysia who are contesting to be the next MD of the firm in the elections soon, and get the truth from them.

Their suppression of evidence is a clear violation of the IBM takeover and the SEC rules back in 2002. So what happens to the entire transaction now?

Click here for Johan Raslan's idiotic tweets while his firm is undergoing a crisis

What sort of checks and balances does the PCAOB have, when they are able to register a firm like PwC Malaysia, which not only commits fraud, but keeps it going for years and years.

What is the difference between PwC and Arthur Andersen? One shreds documents and the other conceals them.

What is the PCAOB going to do about PwC Malaysia? Or are they going to continue ignoring the fraud?

PwC Malaysia Forced To Reveal 162 Sensitive E-Mails, Letters and Documents That Were Previously Concealed From The Kuala Lumpur High Court!

What the Kuala Lumpur High Court failed to do rightfully, in July of 2011, PwC International finally did, by ordering PwC Malaysia to give discovery of documents.


The extent of the concealment, has been so shocking and prejudicial that a continued fair trial is no longer possible. 

Chief Justice Tan Sri Ariffin Zakaria. 
Learned Chief Justice, had the Kuala Lumpur High Court rightfully ordered the Discovery of Documents before the trial , these 162 documents would have made the trial a non-starter. Will the Learned Chief Justice change the rules of the High Court after this?

This latest revelation may seem unbelievable to some, but a hundred and sixty two documents, concealed till now, cannot lie. While we have tried time and again to highlight the sheer perfidy that PwC Malaysia is capable of, even we did not expect that PwC Malaysia would have been capable of this latest shocker.

Whatever your opinion of PwC Malaysia has been till now, be prepared to have it replaced with one of sheer disgust and contempt.

PwC International, is as guilty as PwC Malaysia in allowing this state of affairs to continue for so many years, and they know that their action, or inaction in the face of clear cut fraud, has put the entire brand of PricewaterhouseCoopers at risk. That they have ordered PwC Malaysia to allow discovery of documents, shows that this scandal has implications beyond the borders of Malaysia.

Coenraad Van Beek, Global Leader for Ethics and Business Conduct at PwC International.

Coenraad Van Beek was contacted back in 2010, and was made fully aware of the allegations of fraud against PwC Malaysia, but chose to do nothing.

Paul Boorman, Global Leader for Operation for PwC International.

Paul Boorman, was made aware of the allegation of fraud against PwC Malaysia, and he also chose to do nothing.

In this post, we first showed that PricewaterhouseCoopers LLP, and the Office of General Counsel, were aware of the fraud by PwC Malaysia way back in 2003, and how they chose to do nothing.

Reply from the Office of General Counsel, New York. 

We have another question for the office of General Counsel for PwC International now. Do you practice concealment only in Malaysia or is this a global standard for PwC?

We are well aware that PwC International has been complicit with PwC Malaysia in allowing this acts of fraud and deceit to go on for more than a decade.

Welcome to your comeuppance.

More to come...

DPM Muhyiddin please be careful, PwCgate can overshadow Cowgate

Deputy Prime Minister, Tan Sri Muhyiddin Yassin, the market talk is that PwC Malaysia will be picked to do the audit for the National Feedlot Corporation, NFC, soon.

Can this be true?

Tan Sri, can you imagine Chin Kwai Fatt, the MD of PwC Malaysia, and master of document fabrication, auditing Cowgate?

Chin Kwai Fatt, an original member of the Malaysian 3 Idiots, to audit the NFC?

Chin Kwai Fatt is now trapped by the fact that one of the documents he has fabricated in an ongoing Kuala Lumpur High Court case not only contradicts his own witness statement, but also the amended defense of all the defendants.

Why is the Auditor General's report not enough for the truth about the NFC to be made public?

Even if an external audit is needed, please pick a reputable audit firm to avoid the matter becoming worse. Can Tan Sri imagine the fallout when the auditors are exposed as bigger crooks than those they audit?