PAC trial: Conflicting financial statements among issues removed from 1MDB audit report

  • Nation
  • Tuesday, 19 Nov 2019

KUALA LUMPUR: Two conflicting versions of the 1Malaysia Development Bhd (1MDB) financial statements for the year 2014 were among the four issues removed from the 1MDB audit report, the High Court heard.

Former chief secretary Tan Sri Ali Hamsa, 64, who was reading his witness statement at the PAC trial involving Datuk Seri Najib Razak and former 1MDB CEO Arul Kanda Kandasamy, said the matter was raised during a coordination meeting he chaired with representatives from relevant agencies on Feb 24,2016.

He said the meeting was instructed by Najib to address his dissatisfaction in the 1MDB audit report by the National Audit Department (NAD).

“Najib said he was not satisfied with the contents of the report. He did not want two different financial statements for 1MDB to be submitted in the audit report.

“At that time, I did not know what was the problem with 1MDB’s annual financial statement submitted in the report, ” he said here on Tuesday (Nov 19).

Despite being a member of the board of advisors in 1MDB, Ali said he was never called to attend any meetings in his capacity as a board member nor that he signed any documents.

He said he was never involved in any 1MDB audit process by the NAD.

When the meeting convened on Feb 24, Arul Kanda (1MDB), former Auditor-General Tan Sri Ambrin Buang and Saadatul Nafisah (NAD), Datuk Seri Mohamad Isa Hussain and Asri Hamdin (Treasury), Datuk Dzulkifli Ahmad (Attorney General’s Chambers), Tan Sri Shukry Mohd Salleh (Prime Minister’s Office) and Ali’s senior private secretary Datuk Norazman Ayob were in attendance.

According to the witness, no minutes were recorded during the meeting.

Ali said Arul Kanda had voiced his disapproval on various matters in the report, saying that they were not factual and merely hearsay.

“Arul Kanda insisted that these should not be included in the report. He also insisted that the report be in accordance with what he wanted, ” he added.

At the meeting, Ambrin brought up issues on the two different versions of financial statements for 2014, and this was admitted by Arul Kanda.

Arul Kanda insisted that the conflicting versions should not be included in the report and asked for a police investigation to be conducted.

The meeting agreed that the Ministry of Finance Inc (MOF Inc) would lodge the police report.

Ali said he instructed Isa to lodge the report and Isa had no objections.

Another matter that was struck out of the report was the presence of fugitive financier Low Taek Jho at the 1MDB board of directors meeting relating to the Islamic Medium Term Notes (IMTN) investment.

“This issue was addressed in the report because the NAD’s due diligence found that Low did not hold any position nor played any role in 1MDB.

“Therefore his presence in the said meeting was viewed as a red flag, ” Ali said.

The witness said Shukry requested for Low’s presence to be removed after taking into account the sensitivity of the matter and to prevent it from being manipulated by the Opposition at that time.

Arul Kanda also requested for the removal of the agreement between Country Groups Securities Thailand and ACME Time Limited.

He said the agreement was out of the NAD’s auditing scope because it involved a ‘secondary market’ and outside of 1MDB’s involvement.

The fourth matter that was removed was on the delay in the issuance of IMTN bonds with Government guarantee and Arul Kanda said issues pertaining to the issuance were business decisions.

According to Ali, Ambrin agreed to have all four issues removed.

On March 1,2016, a final review session by the audit team and 1MDB was held at Ali’s office.

“I was not involved in the discussion that day. I only prepared the space for both parties to resolve issues, ” he added.

On March 3, Norazman informed Ali that Saadatul Nafisah from the NAD would come to the office to deliver the newly printed audit report.

The hearing before Justice Mohamed Zaini Mazlan resumes on Wednesday (Nov 20).

Najib is accused of using his position to order amendments to the 1MDB final audit report before it was tabled to the PAC to avoid any action against him.

He allegedly committed the offence in Putrajaya between Feb 22 and Feb 26,2016.

Arul Kanda was charged with abetting Najib in making amendments to the report to protect the Pekan MP from being subjected to disciplinary, civil or criminal action in connection with 1MDB, at the same place and time.

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PAC trial , Najib Razak , Arul Kanda , 1MDB , Audit , Ali Hamsa , Court


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