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Highlights of Najib's 1MDB audit report case for the week

Last update: 30/11/2019
KUALA LUMPUR, Nov 30 – “Datuk Seri Najib Tun Razak had requested me not to include the two versions of the 1Malaysia Development Berhad (1MDB) financial statements in the final audit report,” said former Auditor-General (AG) Tan Sri Ambrin Buang.

The testimony by the former AG was among the highlights of the former prime minister’s trial on a charge with tampering with the 1Malaysia Development Berhad (1MDB) final audit report, with 1MDB former chief executive officer (CEO) Arul Kanda Kandasamy allegdly abetting him, at the High Court this week.

Ambrin, 70, the only prosecution witness who testified this week, told the court that Najib made the request after he (Ambrin) raised the issues on the two conflicting versions of the documents for the financial year ending March 31, 2014 at a meeting in Najib’s office on Feb 2016.

The sixth prosecution witness said that he saw Najib’s request as prime minister as something that must be implemented without any prejudice.

Ambrin further said even though the implication of dropping facts from the 1MDB auditing report was very serious but he agreed to do the amendment after the Pekan MP made a promise to investigate ‘to the bottom of this’ as soon as possible.

The witness however said he felt cheated when he discovered that a police report was never lodged despite the assurance from Najib over the two conflicting financial statements.

Najib, 66, is charged with using his position to order amendments to the 1MDB final audit report before it was presented to the Public Accounts Committee (PAC) to avoid any action against him, while Arul Kanda is charged with abetting Najib in making the amendments to the report to protect Najib from being subjected to action.

Both men have been charged under the Malaysian Anti-Corruption Commission Act 2009, which carries a maximum jail term of up to 20 years and a fine of no less than five times the amount of gratification or RM10,000, whichever is higher, upon conviction.

The following is a recap of the witness testimonies before High Court Judge Mohamed Zaini Mazlan.

DAY 5 (Nov 27)

  • Ambrin told the court that during the 1MDB Audit Report coordination meeting at former Chief Secretary to the Government Tan Sri Dr Ali Hamsa’s office on Feb 24, 2016, Arul Kanda had also urged to drop the two versions of 1MDB financial statements after agreeing that the issue be reported to the authorities.
  • According to the witness, National Audit Department (NAD) was of the view that the issue should be entered into the company’s audit report so that it would enable the matter to be handed to the authorities concerned, such as the Royal Malaysia Police (PDRM) and the Malaysian Anti-Corruption Commission (MACC) to conduct further investigation.
  • Ambrin, who is now chairman of the Special Investigation Committee on Governance, Procurement and Finance in the Prime Minister’s Department, said he ordered all original copies of the 1MDB audit report to be destroyed, except one copy which was kept by NAD audit director (Governance Sector) Nor Salwani Muhammad (fifth prosecution witness).
  • He said the original report, which was printed in 60 copies, was not used as Arul Kanda wanted changes to be made to it.
  • Ambrin told the High Court that he was disappointed in having to entertain the proposed amendments at the last minute and because of that, there was delay in tabling the 1MDB Audit Report to the PAC. The 1MDB Audit Report was supposed to be presented to the PAC on Feb 24, 2016, but because of the amendments, it was only able to be tabled in March 2016.
  • The witness explained that besides the two conflicting versions of the financial statements, the amendments made to the 1MDB auditing reports were on the issue on the suspension of Islamic Medium Term Notes (1MTN), ACME, and the issue on the presence of Low Taek Jhow, who is better known as Jho Low.
  • Explaining further on the issue of the two conflicting versions of the 1MDB's financial statements, Ambrin said the version sent to the Companies Commission of Malaysia (SSM) stated that 1MDB had used RM4.03 billion in funds raised from the Segregated Portfolio Company (SPC) investment to pay off the company's debts.
  • Another version of the financial statement was sent to the Ministry of Finance, Deutsche Bank and AmBank stating that the RM4.03 billion in funds raised from SPC's investment was still in 1MDB's savings, he added.
  • On the issue of the delay in the IMTN issue, Ambrin said 1MDB's special audit team found that on May 27, 2009, Najib, who was then prime minister and finance minister, had been asked to call on Terengganu Sultan Mizan Zainal Abidin.
  • "Sultan Mizan, as patron of the Terengganu Investment Authority (TIA), had ordered that the issuance of IMTN investment be deferred. The adjournment was for the Special Supervisory Committee to review.
  • "However, on the same afternoon (May 27, 2009) a meeting of the Cabinet was held, but Najib did not state or discuss Sultan Mizan's order on the delay in issuing IMTN investment for use for the PetroSaudi Ltd (PSI) and 1MDB joint venture projects,” he said.
  • Ambrin further testified that another issue was on the Country Groups Securities (CGS) Thailand agreement with ACME Time Limited owned by Jho Low, in which Bank Negara Malaysia (BNM) found Jho Low's involvement and investment in IMTN's issuance for PSI joint venture projects with 1MDB, and no investigation was done on the matter by BNM.
  • "According to BNM information, AmBank signed a secondary subscription agreement with CGS on May 18, 2008, meaning that AmBank was the primary buyer of an agreement with CGS and that it (AmBank) had traded its interest in IMTN to CGS, where CGS was a subsale buyer.
  • “It was later revealed that CGS had signed a Put Option Agreement with ACME as a joint transaction partner. BNM claimed AmBank's place out profit was US $127.27 million in which payments were made to CGS of US$ 1.30 million and ACME US$13.42 million and US$12.55 million. NAD reported the matter in the draft 1MDB final audit report," he said.
  • However, Ambrin said Arul Kanda requested that the issue be excluded from the 1MDB final audit report as he was of the view that it was outside the scope of the 1MDB audit issue as the deal involved a secondary market.
  • On dropping of Jho Low's presence in the report, the witness said former Najib's Chief Private Secretary, Tan Sri Shukry Mohd Salleh had asked to drop the paragraph on Jho Low's presence at a board meeting due to its sensitivity and to avoid the fact being distorted by the opposition.
  • "The removal of paragraphs relating to the presence of Jho Low, in my opinion, was intended to prevent the PAC or the readers of the 1MDB Audit Report to know that Jho Low was present at the board meeting to approve the IMTN investment and that it affected the report to the PAC.
  • "I agree for this to be dropped from the report because the NAD audit team was unable to confirm documentary evidence as to whether Jho Low was actually present or not, because there were two different meetings in terms of attendance," he said.
  • Ambrin informed the court that Arul Kanda also sought to limit the scope of the report of SRC International Sdn Bhd, a 1MDB subsidiary, to the period beginning Jan 7, 2011 (i.e. the date the SRC was set up) until Feb 15, 2012 (i.e. the date the SRC was transferred to the Ministry of Finance) only and not until 2014.
  • The witness was also asked about Nor Salwani’s action in placing a recorder in her superior’s pencil case during the audit report coordination meeting without permission, in which he defended her action by saying that Nor Salwani did not breach any code of conduct while doing so.
  • “To me, it's not necessary to ask for permission because the whole intention was for her to take notes for our department. It was for our department's internal use,” Ambrin said.
DAY 6 (Nov 28)

  • The witness told the court that he was informed by Ali during the Feb 24, 2016 meeting that tarnishing the image of the former prime minister would be equivalent to bringing the country's name into disrepute.
  • Ambrin was referring to the audio recording of the meeting which was played in the court last week.
  • The sixth prosecution witness said that those present at the meeting were worried that it would affect the country if the report tarnished Najib’s reputation.
  • Ambrin also insisted that he had no political agenda behind the 1MDB report prepared by NAD in 2016 as he was just the auditor-general doing his job.
  • He said his conscience was clear when he agreed to the amendments to the 1MDB audit report,despite being pressured into doing it.
  • When asked why he did not lodge any police report against the two conflicting 1MDB financial statements, the witness said it did not occur to him at that time.
The trial before judge Mohamed Zaini Mazlan continues on Jan 9, 2020.

-- BERNAMA



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