Asia’s Renaissance Man: Dr. Jose Rizal’s Last Farewell (Mi Ultimo Adios)


Phnom Penh

May 26, 2015

Asia’s Renaissance Man: Dr. Jose Rizal’s Last Farewell

English translation by Charles Derbyshire of Jose Rizal‘s last poem, written in Spanish and known popularly as Mi Ultimo Adios.

Dr. Jose Rizal

My Last Farewell (Mi Ultimo Adios)

Farewell,

dear Fatherland, clime of the sun caress’d,
Pearl of the Orient seas, our Eden lost!
Gladly now I go to give thee this faded life’s best,
And were it brighter, fresher, or more blest,
Still would I give it thee, nor count the cost.

On the field of battle, ‘mid the frenzy of fight,
Others have given their lives, without doubt or heed;
The place matters not–cypress or laurel or lily white,
Scaffold of open plain, combat or martyrdom’s plight,
‘Tis ever the same, to serve our home and country’s need.

I die just when I see the dawn break,
Through the gloom of night, to herald the day;
And if color is lacking my blood thou shalt take,
Pour’d out at need for thy dear sake,
To dye with its crimson the waking ray.

My dreams, when life first opened to me,
My dreams, when the hopes of youth beat high,
Were to see thy lov’d face, O gem of the Orient sea,
From gloom and grief, from care and sorrow free;
No blush on thy brow, no tear in thine eye

Dream of my life, my living and burning desire,
All hail! cries the soul that is now to take flight;
All hail! And sweet it is for thee to expire;
To die for thy sake, that thou mayst aspire;
And sleep in thy bosom eternity’s long night.

If over my grave some day thou seest grow,
In the grassy sod, a humble flower,
Draw it to thy lips and kiss my soul so,
While I may feel on my brow in the cold tomb below
The touch of thy tenderness, thy breath’s warm power.

Let the moon beam over me soft and serene,
Let the dawn shed over me its radiant flashes,
Let the wind with sad lament over me keen;
And if on my cross a bird should be seen,
Let it trill there its hymn of peace to my ashes.

Let the sun draw the vapors up to the sky,
And heavenward in purity bear my tardy protest;
Let some kind soul o’er my untimely fate sigh,
And in the still evening a prayer be lifted on high
From thee, O my country, that in God I may rest.

Pray for all those that hapless have died,
For all who have suffered the unmeasur’d pain;
For our mothers that bitterly their woes have cried,
For widows and orphans, for captives by torture tried;
And then for thyself that redemption thou mayst gain.

And when the dark night wraps the graveyard around,
With only the dead in their vigil to see;
Break not my repose or the mystery profound,
And perchance thou mayst hear a sad hymn resound;
‘Tis I, O my country, raising a song unto thee.

When even my grave is remembered no more,
Unmark’d by never a cross nor a stone;
Let the plow sweep through it, the spade turn it o’er,
That my ashes may carpet thy earthly floor,
Before into nothingness at last they are blown.

Then will oblivion bring to me no care,
As over thy vales and plains I sweep;
Throbbing and cleansed in thy space and air,
With color and light, with song and lament I fare,
Ever repeating the faith that I keep.

My Fatherland ador’d, that sadness to my sorrow lends,
Beloved Filipinas, hear now my last good-by!
I give thee all: parents and kindred and friends;
For I go where no slave before the oppressor bends,
Where faith can never kill, and God reigns e’er on high!

Farewell to you all, from my soul torn away,
Friends of my childhood in the home dispossessed!
Give thanks that I rest from the wearisome day!
Farewell to thee, too, sweet friend that lightened my way;
Beloved creatures all, farewell! In death there is rest!

Jose Rizal: A Biographical Sketch
by Teofilo H. Monte Mayoa

JOSE RIZAL, the national hero of the Philippines and pride of the Malayan race, was born on June 19, 1861, in the town of Calamba, Laguna. He was the seventh child in a family of 11 children (2 boys and 9 girls). Both his parents were educated and belonged to distinguished families.His father, Francisco Mercado Rizal, an industrious farmer whom Rizal called “a model of fathers,” came from Biñan, Laguna; while his mother, Teodora Alonzo y Quintos, a highly cultured and accomplished woman whom Rizal called “loving and prudent mother,” was born in Meisic, Sta. Cruz, Manila.

At the age of 3, he learned the alphabet from his mother; at 5, while learning to read and write, he already showed inclinations to be an artist. He astounded his family and relatives by his pencil drawings and sketches and by his moldings of clay. At the age 8, he wrote a Tagalog poem, “Sa Aking Mga Kabata,” the theme of which revolves on the love of one’s language. In 1877, at the age of 16, he obtained his Bachelor of Arts degree with an average of “excellent” from the Ateneo Municipal de Manila. In the same year, he enrolled in Philosophy and Letters at the University of Santo Tomas, while at the same time took courses leading to the degree of surveyor and expert assessor at the Ateneo. He finished the latter course on March 21, 1877 and passed the Surveyor’s examination on May 21, 1878; but because of his age, 17, he was not granted license to practice the profession until December 30, 1881.

In 1878, he enrolled in Medicine at the University of Santo Tomas but had to stop in his studies when he felt that the Filipino students were being discriminated upon by their Dominican tutors. On May 3, 1882, he sailed for Spain where he continued his studies at the Universidad Central de Madrid. On June 21, 1884, at the age of 23, he was conferred the degree of Licentiate in Medicine and on June 19,1885, at the age of 24, he finished his course in Philosophy and Letters with a grade of “excellent.”

Having traveled extensively in Europe, America and Asia, he mastered 22 languages. These include Arabic, Catalan, Chinese, English, French, German, Greek, Hebrew, Italian, Japanese, Latin, Malayan, Portuguese, Russian, Sanskrit, Spanish, Tagalog, and other native dialects. A versatile genius, he was an architect, artists, businessman, cartoonist, educator, economist, ethnologist, scientific farmer, historian, inventor, journalist, linguist, musician, mythologist, nationalist, naturalist, novelist, opthalmic surgeon, poet, propagandist, psychologist, scientist, sculptor, sociologist, and theologian.

He was an expert swordsman and a good shot. In the hope of securing political and social reforms for his country and at the same time educate his countrymen, Rizal, the greatest apostle of Filipino nationalism, published, while in Europe, several works with highly nationalistic and revolutionary tendencies. In March 1887, his daring book, NOLI ME TANGERE, a satirical novel exposing the arrogance and despotism of the Spanish clergy, was published in Berlin; in 1890 he reprinted in Paris, Morga’s SUCCESSOS DE LAS ISLAS FILIPINAS with his annotations to prove that the Filipinos had a civilization worthy to be proud of even long before the Spaniards set foot on Philippine soil; on September 18, 1891, EL FILIBUSTERISMO, his second novel and a sequel to the NOLI and more revolutionary and tragic than the latter, was printed in Ghent. Because of his fearless exposures of the injustices committed by the civil and clerical officials, Rizal provoked the animosity of those in power. This led himself, his relatives and countrymen into trouble with the Spanish officials of the country. As a consequence, he and those who had contacts with him, were shadowed; the authorities were not only finding faults but even fabricating charges to pin him down. Thus, he was imprisoned in Fort Santiago from July 6, 1892 to July 15, 1892 on a charge that anti-friar pamphlets were found in the luggage of his sister Lucia who arrive with him from Hong Kong. While a political exile in Dapitan, he engaged in agriculture, fishing and business; he maintained and operated a hospital; he conducted classes- taught his pupils the English and Spanish languages, the arts.

The sciences, vocational courses including agriculture, surveying, sculpturing, and painting, as well as the art of self defense; he did some researches and collected specimens; he entered into correspondence with renowned men of letters and sciences abroad; and with the help of his pupils, he constructed water dam and a relief map of Mindanao – both considered remarkable engineering feats. His sincerity and friendliness won for him the trust and confidence of even those assigned to guard him; his good manners and warm personality were found irresistible by women of all races with whom he had personal contacts; his intelligence and humility gained for him the respect and admiration of prominent men of other nations; while his undaunted courage and determination to uplift the welfare of his people were feared by his enemies.

When the Philippine Revolution started on August 26, 1896, his enemies lost no time in pressing him down. They were able to enlist witnesses that linked him with the revolt and these were never allowed to be confronted by him. Thus, from November 3, 1986, to the date of his execution, he was again committed to Fort Santiago. In his prison cell, he wrote an untitled poem, now known as “Ultimo Adios” which is considered a masterpiece and a living document expressing not only the hero’s great love of country but also that of all Filipinos. After a mock trial, he was convicted of rebellion, sedition and of forming illegal association.

In the cold morning of December 30, 1896, Rizal, a man whose 35 years of life had been packed with varied activities which proved that the Filipino has capacity to equal if not excel even those who treat him as a slave, was shot at Bagumbayan Field.

http://www.joserizal.ph/bg01.html

Malaysia’s Ms. Reformasi speaks her mind in OSLO


May 26, 2015

Phnom Penh

Malaysia’s Ms. Reformasi speaks her mind in OSLO

OSLO, May 26 — Five years ago my father, Anwar Ibrahim, delivered a speech right here on Nurul-Izzah-Anwarthis very stage entitled ‘Half A Century of One Party Rule’. He was talking about my country, Malaysia, which has been dominated by the same party for more than 50 years.

That same year here at the Oslo Freedom Forum my father spoke on the same stage as Wikileaks founder Julian Assange, who declared that: “When you meet Anwar, be careful.” During his visit to Malaysia, Julian was detained by secret police just hours after speaking to my father.

My father – a popular and unifying figure in my country’s history – is seen as a very dangerous man by the UMNO party regime. When he served as Deputy Prime Minister and Minister of Finance in the 1990s, he amended the corruption act to further strengthen it – which displeased the political elites – and by September 1998 his anti-corruption campaign led to his sacking from government, arrest, his beating under custody whilst blindfolded and handcuffed, and his eventual sentence and imprisonment in trials that were condemned by rights organisations and governments worldwide.

Initially, it was announced that at least 20 charges would be brought against my father; including treachery, being an American and Israeli agent, corruption and sodomy. They did forget to throw in the kitchen sink. They jailed him for six years, much of which he spent in solitary confinement.

Anwar’s trials earned Malaysia our own International Commission of Jurists report– the very same body that observed Nelson Mandela’s flawed trial. It was entitled: Justice in Jeopardy, Malaysia 2000.

As I speak to you today, Anwar, my father, and the former Opposition Leader of Malaysia, is behind bars again on his second trumped-up charges of sodomy.

I have been told that of the nearly 200 speakers in this conference’s history, only four are in jail right now: my father, Nayeel Rajab from Bahrain, Thulani Maseko from Swaziland, Leopoldo Lopez from Venezuela. The Malaysian regime keeps some very authoritarian company.

Malaysia without AnwarSpecifically, for my father, this is his third incarceration since 1998. He is now in urgent need of medical attention. My father was also a political prisoner in his youth; when he was about my age. Thankfully, he grew more handsome over the years but no less rebellious.

The year 1998 brought the historic Asian Financial Crisis and my father’s imprisonment to Malaysia. Equally important for me, it marked my own political awakening.

As a child I wanted to be an engineer, and I would have pursued that if it wasn’t for the events of 1998. Well, I owe the Malaysian government many thanks for getting me involved in politics. Really, I do.

If my government didn’t abuse institutions – influencing the Judiciary, rigging votes, controlling the media, if they didn’t use force to shut their opponents up – my father would be free, and I might be working for Shell or any other decent oil and gas company. Or maybe not – not with oil at 60 dollars a barrel.

Well, now it is not just Anwar who is Malaysia’s most wanted. It also includes me and the whole opposition, the movement for free and fair elections (Bersih), and many others demanding for a democratic and just Malaysia.

In our last national elections in 2013, Anwar Ibrahim led the opposition to victory, winning 52 per cent of the popular vote. But he was defeated by extreme gerrymandering, malapportionment and election fraud. The ruling coalition clung to power by holding on to 60 per cent of the seats.

The Electoral Integrity Project, based in Sydney and Harvard University recently rated Malaysia as having the worst electoral-district boundaries in the world and among the worst election rules. This places Malaysia alongside countries like Zimbabwe, Angola and Egypt.

The government’s gerrymandering was compounded by the abuse of postal votes. In fact, out of 222 seats we lost almost 30 to postal votes and early votes alone! And since those flawed elections in 2013; almost 20 Members of Parliament and state legislators have been charged, arrested, and locked up, along with 150 others including lecturers, students, journalists, even cartoonist and ordinary citizens.

So now you might be thinking, “What about you, Izzah?”

Growing up, I was a prefect, and like the rest of you here – never smoked pot in my entire life. I played by the rules. I was a model example of a compliant citizen who wanted to go along and get along.

But, mind you, thanks to the corruption, oppression and sheer injustice of the Malaysian government, this girl scout is now a second term Member of Parliament – defeating two sitting Ministers along the way – thanks to my electorate who voted in favour of reforms.

In March, I was recently arrested and locked up for a speech I made on behalf of my father in Parliament.

Yes, beautiful, sunny, twin towers-clad Malaysia. But Members of Parliament have zero parliamentary immunity and can be arrested for sedition.

The whole experience of being a political prisoner in Malaysia is quite bizarre. We have a draconian 67-year-old prison rules that forbid slippers, for example, as the government claims they could be used for suicide. The colonial British laws the Malaysian government loves to preserve.

So you spend the night sleeping on the floor only to be asked questions such as:“Who is this Devil you referred to in your speech made in parliament?”

You see, I had condemned the Federal Court judges in my father’s case for having sold their souls to the Devil. I said this because Malaysia needed judicial reform. Along with electoral reform and fighting for a multiracial Malaysia – where diversity is seen as a strength, not something that divides us.

Malaysian Prime Minister Najib Razak (L) and his wife Rosmah Mansor (R) arrive at the airport in Tokyo on May 24, 2015. Najib is on a three day visit to Japan.   AFP PHOTO / Yoshikazu TSUNO

Malaysian Prime Minister Najib Razak (L) and his wife Rosmah Mansor (R) arrive at the airport in Tokyo on May 24, 2015. Najib is on a three day visit to Japan. AFP PHOTO / Yoshikazu TSUNO

Reformists in my country are the most wanted, and the most feared by our government. Why? Because we are the future – with a zeal for reforms.

Malaysia’s most wanted are those who clamour for an end to the unequal distribution of wealth and against corruption and extravagance of the men or women who govern over us.

Malaysia’s most wanted are those who despair that our children receive low international education rankings – at one point we were surpassed by Vietnam!

Malaysia’s most wanted are those, who reject the use of racial and religious extremism to scare indigenous Malays into voting for the status quo.

Malaysia’s most wanted are those, who realise anti-terrorism laws are often just guises to justify the detention of political dissenters in the name of ‘security and stability.’

Malaysia’s most wanted, who are sick to the bone with failed governance and mammoth financial scandals. Most recently is the controversial government investment fund, 1MDB has burdened Malaysia with a RM42 billion debt.

The Prime Minister also the Finance Minister is the chairman of 1MDB’s board of advisors. Dubious financial dealings now go hand in hand with the Malaysian government.

Shout out to Mr Tom Burgis – meet our very own Sam Pa.Malaysia’s most wanted are the young generation of Malaysia, who up to 88 per cent voted for my party in the recently concluded Permatang Pauh by-elections.

My father’s seat – which he lost upon his conviction – has been retained by our party, despite the enormous political and financial obstacles put in our way by the regime. Malaysia’s most wanted will not give up. Just last week, the Opposition Coalition chose my mother as Malaysia’s Opposition Leader. They can’t lock all of us up. The reformist might be behind bars but the reform agenda stays true.

We know that more of the world will see beyond the Petronas Twin Towers and give more attention to us, Malaysia’s most wanted, the rising dissidents and democrats who refuse to accept the current government.

So what of the future you ask? I’ll tell you. The future belongs and will be determined by Malaysia’s most wanted.

Long live reforms. Long live reformasi!And thank you Thor and the selfless team at Oslo Freedom Forum for allowing Malaysians to live in truth.

God bless you.

* The above is the text of the speech delivered by Nurul Izzah as the first speaker at the Oslo Freedom Forum in Norway.

– See more at: http://www.themalaymailonline.com/what-you-think/article/malaysias-most-wanted-nurul-izzah#sthash.1LHXfjov.dpuf

Najib will have two eyes meeting with his Finance Minister on 1MDB


Phnom Penh

dinat UCThis is a parody of sorts. It is arguably one of the best jokes I have heard on the 1MDB Scandal in recent months. Yet it rings true because it is what I had suspected for a long time. Prime Minister Najib Razak has been talking to himself and sleepwalking in the wee wee hours of the morning. He has been trying to convince himself that 1MDB has no problems whatsoever. Tun Dr. Mahathir, Tony Pua and Rafizi Ramli in the Opposition and the rest of us are making 1MDB the pretext to demand his resignation. It is the Finance Minister who should take full responsibility.

On his instructions the MACC with Tunku Abdul Aziz as its adviser cum leader of the investigation team will now look into the matter, leaving no stones unturned. I am sure that given MACC’s sterling record, they will recommend to the Attorney-General that the Minister of Finance should be charged for corruption and fraud.

The Auditor-General who will absolve the Prime Minister of any wrongdoing will likely find that Chairman Lodin Wok Kamaruddin and other 1MDB Directors have failed to perform their fiduciary duty diligently, and the management team led by a certain hot shot Mr. Arul has been dishonest and there is sufficient evidence to prosecute them. For that, Prime Minister deserves our applause for taking decisive  action to bring the 1MDB saga to a closure.–Din Merican

najib-n-obamajpg

Najib will have two eyes meeting with his Finance Minister on 1MDB

PUTRAJAYA: Govt sources confirmed today (May 25) that upon his return from Japan, Prime Minister Najib Razak will attend a private two-eyed meeting with the Finance Minister to discuss ongoing problems with the heavily indebted 1MDB wealth fund.

“The PM knows ultimately the buck stops with him,” said a source, “but given 1MDB is a subsidiary of the Ministry of Finance, the Finance Minister must shoulder some responsibility for the rampant mismanagement of the nation’s funds.”

“Also attending the meeting will be 1MDB’s Chairman of the Board of Advisers as 1MDB was his idea, and was likely fully-aware of the fund’s unfortunate investment decisions.  The BN Chairman and President of UMNO will also sit in to weigh the damage 1MDB’s land sale to Tabung Haji did to the government’s credibility.”

Political transparency watchers were impressed with the move, “Hopefully with these great minds attending the two-eyed meeting we may soon learn ultimately who is responsible for this costly 1MDB train wreck!”

  – See more at: http://fakemalaysianews.com/2015/05/25/1mdb-crisis-pm-to-sit-down-with-finance-minister-in-special-two-eyed-meeting/#sthash.czTEAs6R.mINjonjH.dpuf

The New Dictators Rule by Velvet Fist


May 26, 2015

Phnom Penh

The New Dictators Rule by Velvet Fist

Cambodia’s Pluralist Democracy in the Making


May 25, 2015

Phnom Penh

Positive developments in Cambodia towards pluralist democracy, Yes. I am personally optimistic that change will come under the pragmatic leadership of Samdech Hun Sen, but it will be gradual by a process of evolution towards  democracy with a functioning market economy. It is worth noting that throughout its proud history Cambodia never had a tradition of democratic politics.In that sense, what has been accomplished so far is quite amazing and indeed praiseworthy.

The Cambodian story must be told so that ASEAN and the rest of the world can appreciate what Prime Minister Hun Sen has achieved over the 30 years at the helm of his country in promoting peace and reconciliation,  national integration, and cooperation and economic development. Efforts in reforming the education system and public administration and creating a foreign investment friendly business environment are ongoing. More work ahead remains, no doubt, but the country is already moving forward in the right direction.–Din Merican.

Cambodia’s Pluralist Democracy in the Making: Interview with Sebastian Strangio

By Sophat Soeung

WASHINGTON—Editor’s note: The strong performance of the Cambodian oppositionSebastian-Strangio-f in the 2013 elections and subsequent call for leadership change surprised many observers. Nevertheless, Prime Minister Hun Sen continues his rule and has recently marked 30 years in power. Sebastian Strangio, a former reporter for the Phnom Penh Post and author of “Hun Sen’s Cambodia,” recently joined VOA Khmer for a TV interview at the Voice of America studios in Washington, to discuss the future of Cambodia’s political system.

You moved to Cambodia in 2008, the year there was an election that was arguably the height of the popularity of Hun Sen and the ruling party. Did the results in the elections five years later surprised you?

They did, yes. I think there were very few people who guessed what was going to happen. 2008 was an overwhelming victory for the Cambodian Peoples’ Party (CPP). And it seemed as if they had established their dominance to such an extent that it is now beyond challenge. But what 2013 showed is that we were mistaken about a lot of this, or we overlooked many of the social and economic changes that had taken place, not only over the past five years, but over the past two decades.

After the elections, the ruling party promised deep reforms. To what extent do you think they can deliver on that promise?

Well, it’s always going to be a challenge for them. I think that Hun Sen realizes the importance of reform and that if he doesn’t do it, doesn’t take steps to improve things for ordinary people, that the party is going to have a very difficult time being reelected in 2018. You can already see that they have started to take steps in education and environmental policy, but the problem with the Cambodian political system is that Hun Sen relies so heavily on a class of tycoons and business people and powerful military commanders and government officials. And his rule has been based on keeping these people happy. Now the $60,000 question is whether he will be able to reform the system enough to keep people from switching their vote to the opposition while still maintaining the power and support of these individuals who have supported his rule for so long.

What is your sense of that?

So far the contradictions remain. The government has taken some positive steps, reforming education, for instance, but when it comes to challenging the entrenched economic interests that exist in Cambodia, the powerful tycoons and their connection to things like logging and deforestation, land grabs, that link has been very difficult to sever. There is still an incredible inertia out in the provinces. The logging continues, land grabs continue, and I think that the government has only a limited amount of power to really stop it. The system relies too heavily on this. So only time will tell whether they’re ultimately successful in getting that balance right.

Part of the question also rests on the opposition, which has also been criticized for lack of leadership. I think you mentioned that somewhere in your book as well. Now do you see the opposition as a viable alternative in the next election? And what more should they do to actually live up to some of the promises that they’ve given?

It is very difficult for the opposition, because in a political system that’s based on patronage, which is the way Cambodia works today, and the bonds of loyalty between ministers and their staff and military commanders and soldiers that serve them. It’s very difficult for the opposition to simply slot into that system and command the loyalty of all of these civil servants and soldiers and police officials. And so in that sense they face huge challenges, and I think the best thing the [Cambodian National Rescue Party] can do at the moment is to work away slowly at promoting better policies and pushing their agenda in parliament and then hope that slow, incremental change allows them more and more say in how the country is governed.

I don’t think a rapid transition of power is likely in Cambodia, and, in the past, most transitions of power from one group to another have involved some sort of violence. So I think a slow sort of evolution is probably the best course, but I don’t think the party is in a position to immediately take control of the country, nor do I think Hun Sen is in a position or of an inclination to grant them that.

In your book, you seem optimistic about Cambodia’s younger generation. An analyst mentioned that the future of Cambodia rests on that generation’s ability to produce its own leaders to avoid what he called “old politics.” How and when do you think that might happen?

I think it is already starting to happen. The Cambodian population is more educated and more connected to the outside world than ever before. And so I think we’re already starting to see young people rise up, either in the NGO sector or the private sector, who have incredible leadership abilities. The question is whether the current political system will allow them to use their talents in government. So far the 18 months since the election have been pretty much politics as usual. It’s been old politics. It’s been negotiations between key individuals, a lot of egos, and not a lot of substance.

It is generally understood that Hun Sen is grooming his children for a future transition. What will be the consequence of that?

It’s too soon to say exactly what the CPP is planning. It is certainly planning some sort of generational succession. You see that with not just Hun Sen’s children, but also many other ruling party officials have maneuvered their sons and daughters into positions of power. But as with everything in the CPP, it depends not just on what Hun Sen wants but also on what all of the powerful people that have a stake in the current system, what they want. And I think that any potential candidate to take over from Hun Sen will have to have the loyalty of the majority of the country’s powerbrokers. And I think it is too soon to say who might be in a position to command that sort of loyalty.

You say in your book that the Cambodian story needs to be told. What do you think is the biggest lesson that you’ve learned from Cambodia that can be applied in the region?

I think it is the fate of Cambodia’s democratic transition. In places like Myanmar right now, we see a similar sort of transition happening: a move from a closed, isolated, and embargoed system, to one that’s welcoming international aid and foreign investment. But I think what Cambodia shows is the ability to engineer democracy in a country that has such a violent and unstable history and very little history of democratic government was always going to be a tall order, and I think it is a cautionary tale for the ease with which these sorts of systems can be simply built from the ground up. But the problem is that very few people pay attention to Cambodia anymore, and it is a pity, because I think these lessons are very clear and I think if people looked to Cambodia and analyzed what’s going on in the last 20 years since the UNTAC mission of the early 1990s, I think they would have much more temperate expectations about the democratic possibilities for somewhere like Burma.

This article originally appeared on VOA Khmer here.

 

Why auditors can’t guarantee there was no fraud at 1MDB


May 25, 2015

Why auditors can’t guarantee there was no fraud at 1MDB

by THE EDGE MALAYSIA

Published: 25 May 2015 7:00 AM@www.themalaysianinisder.com

The backers of 1Malaysia Development Bhd (1MDB) have argued that because international accounting firms like KPMG and Deloitte have signed off all 1MDB’s accounts from FY2010 to FY2014, this meant no money has gone missing and no fraud has occurred.

Mm_Cover_NEW_1068.inddThis argument has been used to justify the not-so-eloquent silence of the management and board of directors of 1MDB, who have refused to respond to questions posed to them about various transactions and the movements of billions of ringgit.

They hide behind that argument despite the fact that 1MDB has run into serious cash-flow problems and can no longer service its debts, and so many questions have been raised about the whereabouts and nature of the so-called Available-For-Sale Investments valued at RM13.38 billion in its accounts for financial year ended March 31, 2014.

Critics of 1MDB have been asked to back off and let the Auditor-General complete his work to review the audit of 1MDB.

The argument that because 1MDB’s accounts have been signed off by auditors meant that no fraud has occurred and that money was not missing is flawed. It shows that these people do not know what they are talking about.

They have badly misinterpreted, deliberately or otherwise, the role of external auditors and they do not understand the meaning of an auditor’s report when the auditors sign off the financial statement of a company.

There are no auditors in this world who will agree that their signing off on an account can in any way or form be interpreted to mean that they confirm or guarantee that the accounts are completely true, accurate and do not contain any misstatements, by fraud or error.

The International Standards for Auditing guidelines for auditors state that the external auditor is responsible for obtaining reasonable assurance that the financial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error.

That reasonable assurance is based on the external auditor trusting that the management and board of a company have carried out their fiduciary duties and were not involved in any fraud or have concealed any fraud.

Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement may not be detected, even when the audit is planned and performed in accordance with international accounting standards.

The risk of fraud is higher than those of error because fraud usually involves sophisticated and carefully organised schemes designed to conceal it.

Therefore, it is not the role of an external auditor to determine whether fraud has actually occurred. That is the responsibility of the country’s criminal and legal system.

Malaysian_financial_scandals-graphic-240515-the_edgeIndeed, auditors call the discrepancy between what the public expects and what auditors do as an “expectations gap”.

Let us now take a closer look at Deloitte’s audit report issued to 1MDB on November 5, 2014, for the financial year ended March 31, 2014. The fact that it was issued more than seven months after the year-end in itself should raise concerns.

Para 2: The directors of the company are responsible for the preparation of these financial statements so as to give a true and fair view. The directors are also responsible for such internal control as the directors determine what is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Para 3: Our (Deloitte) responsibility is to EXPRESS AN OPINION on these financial statements based on our audit… and perform the audit to obtain REASONABLE assurance about whether the financial statements are free from material misstatement.

The above remarks by Deloitte is a standard template statement issued by auditors to most companies. What is important to note are the following:

1. The directors of 1MDB are ultimately responsible for the accounts in so far as they give a true and fair view. The directors are also responsible for internal controls that are necessary to enable the financial statements to be free from misstatements, whether due to fraud or error. This is NOT the responsibility of the auditor.

2. The auditors only express an opinion that they, as external auditors, have done what is necessary to obtain REASONABLE assurance about whether the financial statements are free from material misstatement.

3. Critically, the external auditors DO NOT express an opinion on the effectiveness of the company’s internal controls.

In short, while auditors should be able to detect defective keeping of accounting records, they cannot detect falsified accounting documents. And neither can they question management decisions on, say, an investment that it made.

The questions asked of 1MDB mainly relate to the effectiveness of internal controls and corporate governance:

– Who approved the agreements and the various payments made since 2009?

– Why were funds diverted from what they were approved for? Why was money sent to an account controlled by Jho Low?

– Why did 1MDB overpay for the power assets, the Penang land and the commissions to the bankers like Goldman Sachs?

– Who verified and agreed to pay the US$700 million to PetroSaudi, purportedly as settlement of a loan?

– Why was Jho Low giving instructions to the management on matters of 1MDB?

– Who agreed to the Aabar options and then agreed to a termination settlement that cost 1MDB US$1 billion?

All these major issues that have been raised are about internal controls, decision-making and corporate governance at 1MDB.

Deloitte, in their audit report, had clearly stated they are NOT expressing any opinion on the effectiveness of 1MDB’s internal controls.

So, please stop passing the buck to Deloitte or using the fact that it signed off on the accounts, to say that nothing wrong has happened and that everything at 1MDB is fine.

And since the auditor-general has merely been asked to audit the work of Deloitte, it is most likely the case that his mandate is no more than that of Deloitte.

It is clear. The board of directors is responsible in ensuring the accounts are true and fair. The board is responsible for internal controls to ensure there is no fraud.

The auditor only expresses a reasonable opinion. Nothing more.

Global_financial_scandals-graphic-240515-the_edge

The corporate sector, at home and around the world, is littered with many examples of corporate fraud that escaped the scrutiny of auditors. In a few cases, auditors were also culpable, if not outright complicit.

The largest corporate fraud ever in the world was US energy giant Enron, whose US$78 billion market value was wiped out in days. Former Enron President Jeff Skilling is still serving a 24-year jail term.

And its auditors, Arthur Andersen, one of the Big Four accounting firms in the world then, had to cease operations.

Bernard Madoff’s US$65 billion Ponzi scheme is evidence that funds under management, with third-party valuations by international institutions, may also be subject to misappropriations and fraud. Madoff is currently serving a 150-year sentence in prison.

An article was published in the November 20, 2012 issue of Forbes magazine, on how Hewlett-Packard (HP) lost US$5 billion on a US$11.1 billion acquisition.

HP said it had to write down the value of UK software company Autonomy because it was inflated through serious accounting improprieties, misrepresentation and disclosure failures.

That scam tainted all the auditors involved – Deloitte as the auditors for Autonomy and Ernst & Young, the auditors for HP – for not detecting the fraud.

Need we say more? – May 25, 2015.

http://www.themalaysianinsider.com/malaysia/article/why-auditors-cannot-guarantee-there-was-no-fraud-at-1mdb#sthash.vdfOeUUZ.dpuf