DAP lawmaker Tony Pua has questioned whether audit firm Deloitte Malaysia was "bluffed" by 1MDB into believing that the troubled state fund had redeemed its controversial Cayman Islands investment in 2014.

At that time, there was great concern over 1MDB’s US$2.318 billion investment in an obscure investment fund based in Cayman Islands.

The authenticity of the investment was publicly questioned and the company came under immense pressure, resulting in the demand for the money to be repatriated.

"Based on the testimony of Deloitte to the Public Accounts Committee (PAC), the auditors were particularly insistent that 1MDB was able to redeem most, if not all, of the Caymans investment before signing off the much-delayed statements which were already past due," Pua, who is a PAC member, said in a statement today.

“The accounts were finally signed off by Deloitte when 1MDB was able to ‘show’ the auditors that US$1.22 billion have been redeemed. The money was however, not repatriated to Malaysia.”

He pointed out that in 1MDB’s March 2014 financial statement, it was stated that the amount redeemed from the Cayman Islands investment was instead "substantially utilised for the purposes of debt interest payment, working capital and payments to Aabar (Investments PJS Ltd or Aabar BVI) as refundable deposits".

However, following a series of exposés by whistleblower site Sarawak Report, Pua said there are now concerns that no such money had been redeemed from the Cayman Island-based investment fund.

According to Pua, it was found that 1MDB, through its wholly-owned subsidiary Global Investment Limited (1MDB GIL), had made several large payments to Aabar BVI in 2014.

“Why did 1MDB GIL pay Aabar BVI the money even though there were no business transactions, agreements or dealings between the two entities? Why wasn’t these fund transfers disclosed and explained during (1MDB chief) Arul Kanda’s testimonies with the PAC?”

Pua claimed that these transactions were apparently meant to "hoodwink" Deloitte into accepting that the funds "purportedly received" from the Cayman Islands investment had been used to pay Aabar BVI.

“The catch is, the money used to pay Aabar (BVI) did not come from the controversial Caymans investment, but from 1MDB’s own funds in its wholly-owned subsidiary, 1MDB GIL!” said Pua.

"We call upon Deloitte to review the documents shown to them, for them to be so sufficiently satisfied as to sign off the 1MDB accounts so readily.

"Should these documents shown to them prove to be fraudulent or manipulated on hindsight, they must immediately file police reports to clear their name and ensure that the crooks are investigated," he said.

Pua had previously raised concerns over the payment to Aabar Investments PJS, a subsidiary of International Petroleum Investment Corporation (IPIC), as it had been reported that almost US$1 billion did not go to them.

Instead the money went to a different company  ̶  Aabar Investments PJS Ltd (Aabar BVI)  ̶  registered in the British Virgin Islands.