1MDB: The Background

Abstract

The 1MDB stands for 1Malaysia Development Berhad. It is a company formed in 2009 by the federal government of Malaysia. 1MDB had become such a problem for many by late 2014. And today a year later the sad and debilitating saga continues unabated. The case of the 1MDB should be of a particular interest for students and scholars of auditing, accounting and corporate governance since it involves the following: the alleged disappearance of a huge amount of company’s funds; the apparent hiding of significant amount of real losses year after year with the accounting of paper profits originated from repeated fair revaluations of properties or other assets; the possibility of repeated cases of audit failure; the probe conducted by various parties locally which include the Office of the Auditor General; and, the lack of evidence of best practices in corporate governance being implemented since its formation. Each of these five areas of concern is laid bare in a series of five case studies where the materials come mainly from three news portals which are based inside the country: MalaysiaKini, The Malaysian Insider and Free Malaysia Today. All the published materials of concern are dated up to the end of June 2015. It is also notable that following the completion of these case studies, the work on another series of case studies shall be embarked upon. The new series shall give focus upon what has taken place since early July 2015. The intention behind the writing of these cases is to have them used in classroom discussions to help towards the emergence ofMalaysia tomorrow that so many inside the country has embarked upon so that history is given as little chance as possible in repeating itself!