Ali: Najib was not satisfied with 1MDB audit report

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KUALA LUMPUR: Datuk Seri Najib Tun Razak was not satisfied with the contents of the 1Malaysia Development Berhad (1MDB) audit report which was to be presented before the Public Accounts Committee (PAC) on Feb 24, 2016, the High Court here was told yesterday.

Former Chief Secretary to the Government Tan Sri Dr Ali Hamsa said this was related by the former prime minister when he (Ali) was called to Najib’s office on Feb 22, 2016.

Ali, 64, who held his post until August 2018, said also present during the meeting was the former Auditor-General Tan Sri Ambrin Buang.

“(During the meeting) Datuk Seri Najib mentioned that he did not want two different financial statements for 1MDB to be submitted in the 1MDB audit report. At that time, I did not know what the problem was with 1MDB’s annual financial statements,” he said.

Ali told the court that despite being a member of the board of advisors of 1MDB, he was never called to attend any meetings as a member of the board, and he had never signed any documents in such capacity.

“I was never involved in any 1MDB audit process by the National Audit Department (NAD). During that meeting, I had never even read the 1MDB audit report which Datuk Seri Najib referred to,” said the fourth prosecution witness on the second day of the joint trial of Najib and former 1MDB chief executive officer Arul Kanda Kandasamy over the alleged tampering of the 1MDB final audit report.

Asked during examination-in-chief by lead prosecutor Datuk Seri Gopal Sri Ram about Najib’s demeanour during the meeting, Ali said he noticed that Najib looked a little upset and after the discussion, he was instructed by Najib to conduct a coordination meeting between the NAD and Arul Kanda, with regard to any dissatisfaction the NAD had over the 1MDB audit report.

“I was also instructed not to print the 1MDB audit report until I had his (Najib) approval. At that time, I did not have any knowledge about the status of the 1MDB audit report, whether it had been finalised or not,” he said.

Ali who was in the civil service for 38 years, said that on Feb 23, 2016, during a meeting at his office with Ambrin and Tan Sri Shukry Mohd Salleh, the former principal private secretary to Najib, Shukry informed them that the 1MDB audit report had become a crisis that had to be handled immediately.

Ali further testified, that at the start of the meeting on Feb 24, 2016 which he chaired, he had informed everyone present that the meeting was held on the instructions of Najib who wanted coordination on the 1MDB audit report.

“During the meeting, no minutes were recorded. All issues about the 1MDB audit report raised by the NAD were discussed one by one. They were then addressed by Arul Kanda,” he said.

Ali told the High Court that Tan Sri Muhyiddin Yassin was sacked from the deputy prime minister post after he had raised too many questions about the sovereign wealth fund, 1MDB in 2015.

He also said that former Attorney-General Tan Sri Abdul Gani Patail was removed from his position in July 2015 as Najib lost trust in his chief legal adviser.

“When we sit in cabinet meetings, we see arguments going on. It was mostly one-sided, Muhyiddin made all the noise in the cabinet; we know something is coming up,” he said.

Asked how the accused reacted to those questions raised by Muhyiddin, the witness said Najib was calm at the cabinet meetings and some answers were given, but some were given by the second finance minister.

Queried what happened to Muhyiddin after he asked those questions, Ali said, “I think he was removed from the post.”

When asked to explain the circumstances of which Abdul Gani left his office, the witness said, “there was no trust on him by the Prime Minister.”

“Actually, when I handed over a letter to Gani Patail, telling him he would be released from the AG’s post, he said he expected this to happen … It was a two-stage process to sack Abdul Gani. First, a letter to the Yang di-Pertuan Agong informing of the termination of his post followed by a letter from Najib addressed to Abdul Gani, informing him of the termination.

“I was called by Najib to sign the letter and give it to Abdul Gani and tell him to vacate his post, and don’t take any documents out of the office,” he said.

Sri Ram: Do you know what led to the loss of trust (in Abdul Gani)?

Ali: In the cabinet at the time, there were some issues with the deputy prime minister then, Muhyiddin. I was informed by Najib that Abdul Gani and Muhyiddin met at a shopping centre, somewhere in Kuala Lumpur while shopping. That’s one thing that may be an issue.

When asked what happened to the former Malaysian Anti-Corruption Commission (MACC) chief Tan Sri Abu Kassim Mohamed, the witness said Abu Kassim also wanted to take leave in August 2016 after he suffered from a prolonged backache.

Ali also testified that there were four issues agreed to be removed from the 1MDB audit report, including two conflicting versions of the company’s 2014 financial report.

He said Ambrin brought up the issue in a 1MDB Audit Report coordination meeting, which was held on the instruction of Najib on Feb 24, 2016, but no minutes of the meeting were recorded.

“1MDB Chief Executive Officer Arul Kanda Kandasamy was present at the meeting and he had voiced disapproval on various matters in the 1MDB report, and I asked him to explain the reason after he admitted about the two different versions of 2014 1MDB financial report,” he said.

Ali said Arul Kanda had disapproved of the matters highlighted in the 1MDB audit report by the National Audit Department, as they “were not factual and were merely hearsay”, therefore insisted that such matters be omitted from the report.

The witness said Arul Kanda also insisted that the conflicting versions should not be included in the 1MDB Audit Report and asked for a police investigation to be conducted.

“The meeting also raised the issue of fugitive businessman Low Taek Jho or Jho Low’s presence at the 1MDB Board of Directors meeting related to the Islamic Medium Term Notes (IMTN) investment.

“It was raised in the 1MDB Audit Report because the National Audit Department’s due diligence found that Jho Low did not hold any position nor play any role in 1MDB thus his presence was viewed as a red flag,” he added.

He said a representative from the Prime Minister’s Office, Tan Sri Shukry Mohd Salleh, then requested that the issue be removed from the 1MDB Audit Report, taking into account the sensitivity of the matter and to prevent it from being manipulated by the opposition party at that time and Ambrin agreed.

“A representative from Attorney-General’s Chambers, Datuk Dzulkifli Ahmad, also had the same view (as Arul Kanda) and Ambrin then agreed to have that issue removed from the audit report,” Ali said.

Najib, 66, is represented by lawyer Tan Sri Muhammad Shafee Abdullah, while Arul Kanda, 43, is represented by lawyer Datuk N. Sivananthan.

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

Both men have been charged under provisions of the Malaysian Anti-Corruption Commission Act 2009, which carry 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 trial before Judge Mohamed Zaini Mazlan continues today. — Bernama