Ernst & Young's Habibah Abdul (extreme left when she was at the Securities Commission), came in to conduct their routine annual audit of the Golden Hope Group accounts for the financial year ended June 30, 2007 (Audited Accounts) and reported the loss under Note 37, which covers financial instruments and sets out the fair values of financial assets and liabilities not carried at fair value on the balance sheet.A RM77.5 million item was described under Note 37 as a "financial liability that represents unrealised losses from forward commodities contracts as at June 30, 2007’’.
In their briefings to both the GHope audit committee and the GHope Board, Ernst & Young did not specifically highlight the RM77.5 million trading losses.
But who is Habibah? This woman is the central figure involved in signing off the accounts of Technology Resources Industries Bhd (now Celcom), Naluri and Malaysia Airlines during Tan Sri Tajudin Ramli's time. She and Tajudin are from same alumini. Habibah was the signing partner for these firms, and after Tajudin left Mas and Naluri, police reports were lodged by the management for mal- practise and falsifying invoices.
Interestingly during that period, Habibah was also a member of the Securities Commission. The SC as we know, are reeling from bad publicity, after it emerged a former top second tier telco boss was charged this year, with accepting millions in bribes on behalf of a senior SC official.
17 comments:
Is Malaysia ENY is another AA in the making?
Keturunan Jebat
Hi Keturunan Jebat,
Pardon me, but who/what is ENY?
Sorry, Ernst and Young you mean. EnY!!
Each of EYG and its member firms is a separate legal entity and has no liability for another such entity's acts or omissions.
You mean Ernst & Young Malaysia has a seperate from their UK principles?
Yes, M.I.H EnY and AA is the infamous Arthur Andersen which fell from grace together with Enron and no longer exist.... Just to share with you.... I am kinda feel cheesed off with the big accounting or so call international financial consulting firm coz they you are either subsidiazing their so call senior or foreign partners while people like me who actually do real work get peanuts or discriminated just because we do things ethically as with integrity and our skin are not white enough or our consulting name are not foreign enough...in other words we are local....
Keturunan Jebat
BTW, since you are on the CEO watch and they are no angels....what does the PNB think they are doing putting a TELCO CEO to do Banking? Especially the said CEO did not actually have a stellar track record in TELCO? Professionally I have no high regard the way things are done there either...I should know as I had done some job for their holy highness. Anyway the Bank in question has also its own dubious dealings....being a GLC also.... and guess who is the external auditor for the bank?
Keturunan Jebat
The country is going to the dogs.
if an outfit like E&Y is doing what it is doing.....we've all had it, man!
keturunan jebat,
There's certainly a connection. After the AA/Enron debacle, AA merged (or took over, more like) with EY and that's the EY that we have today.
-galapagos-
ENY ??? not surprising at all ... They bought over Arthur Andersen which collapsed after the ENRON scam.
BTW, they have been Con Sulting Khazanah on the GLC KPIs,, Green manual etc,etc and all the other scams about to explode.
Man, the whole country is going to explode becos of one person and the Black midas!!!
Ernst & Young is a Big 4 Accounting firm, it merged with Arthur Andersen Malaysia after theEnron debacle. Habibah Abdul was formerly a partner from Arthur Andersen. That however shoudl not distract from the fact that this article is damaging most uninformative. It is not the auditors or any outsiders role nor responsibility to disclose any figures to the audit committee (AC), the AC should already have known about it beore the accounts are audited as it is their responsibility to review the accounts every quarter prior to the announcement, and AC which requires the auditor to tell them of such an amount, well then the AC members should be shot. The auditors role is to ensure that this is correctly disclosed in the Audited Financial Statements and it was done so in compliance with FRS139.
Lots more tahi coming! Oh..! it is certainly a dog eat dog world!
Most of the comments made are similar to the article, made by uninformed individuals who have no idea what is going but form an opinion based of Coffee Shop talk, do try to understand the roles or auditors, accountants and Audit Committee Members, before disparaging comments are made. In times of consistently higher commodity prices, losing money on futures contracts is most common, GH's fault is that they played too big, that si had too big a risk appetite, they seemed to have used it as a money making speculative tool rather than one to hedge their production and revenue, this si where the Audit Commitee shoudl be questioned.
In the previous multinational company that I worked in, E&Y was the auditors and they made life diffficult as they were very kiasu and kiasee which was in a way was ok as they made sure we complied with the rules. The partner in charged of our audit was pretty tough as were the audit manager (they keep changing managers due to high turnover). I guess there are different types of partners. One set for MNC and another for crony companies. Nevertheless, E&Y seriously needs to do quality control before their name is dirtied. And I was thinking of getting them to be the auditors for the company I am attached to now. Guess I better stick to the one auditing us now.
"In their briefings to both the GHope audit committee and the GHope Board, Ernst & Young did not specifically highlight the RM77.5 million trading losses."
The above para which was in bold and large fonts for emphasis is indeed misleading.
Pleez ... the financial statements are the primary responsibility of the board of directors (including audit committee) and NOT the auditors. Most directors are unaware of (or refuse to accept) that fact.
Auditors are only the watchdogs to ensure proper and accurate disclosures are made in accordance with accounting standards (as in the case of GHope).
Tsk tsk ... expecting the auditors to do this and do that which are outside their scope and when things go wrong - the auditors get the chop. Sigh ... tough life.
ex-auditor,
You are not being fair to your former profession!! Most auditors I have come in touch with don't just to the minimum to get by. If Ernst & Young's aim is to be just watchdogs, that's too bad. And that explains why it's being barked at and bitten by all and sundry.
Thank you.
These are serious allegations. It's good that it's being highlighted especially for investors relying on audited financial statements.
I've just started a blog on analyzing financial statements would hate to think that this exercise is rendered useless due to issues with the *reliability* of audited financial statements.
http://wonderwealthwisdom.blogspot.com/
Rgds
talk about pissing up the wrong tree..... hang the auditors. Sure. why not. Meanwhile, the directors are sitting in their Boardrooms pleading innocence and ignorance. Tak pa, it's okay to have ignorant directors running the show. After, all doesnt take much to get onto a Board of a listed company these days. Asalkan u know somebody or are somebody cukup lah. Whether you have brains, contribute, question or even bother about what the hell is going on during the Board meetings is another question. Tak pa, dapat directors' fee kan.... I've met and dealt with many Boards before and let me tell you this. MOST OF THEM are CLUELESS. You have a Board of 10 people, yet the only one who ever talks is the CEO or MD. You present problems to them, they look at their watches and tell you they have another appointment. I say this - HANG the damn directors man. They're rich enough.
True, the auditors are not entirely innocent, but please pin the blame on the people primarily responsible for financial management - the directors and the management of the Company.
You guys actually believe nobody knew about GH futures trades other than the trader and the CFO? For that value? Please lah.... let's not be so naive.... You think the CFO just offered to leave like that without getting some handsome compensation for all his efforts in making the RM77 million loss? Please lah.... jangan dogol sangat
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