The Malaysian Insight

THE destruction of copies of the original audit report on 1Malaysia Development Berhad (1MDB) was discussed by top government officials at an inter-departmental meeting on February 24, 2016 that was chaired by then chief secretary to the government Ali Hamsa, the high court heard today.

According to an audio recording of the meeting heard in court today, those present had also discussed lodging a police report over conflicting information in 1MDB’s financial statements for the year 2014, before the conversation moved to destroying copies of the original audit report.

The two-hour audio recording was played in its entirety by the prosecution at former prime minister Najib Razak’s trial for tampering with the 1MDB audit report, showcasing how officials sought to remove portions of it before presenting it to Parliament.

Ali, the fourth prosecution witness, testified that he was asked to chair the meeting by Najib to resolve “certain issues” in the auditor-general’s report on 1MDB.

Najib is accused of using his position to remove parts of the final 1MDB audit report, between February 22 and 26, 2016, at the Prime Minister’s Department before it was tabled to the Parliament’s Public Accounts Committee (PAC) to protect himself from criminal action.

Former 1MDB CEO Arul Kanda Kandasamy is also on trial for abetting Najib. He was also present at the February 2016 meeting.

Also at the meeting was then auditor-general Ambrin Buang, who spoke of the need to finalise an amended report quickly before it was to be presented to PAC.

The following are audio excerpts of the recording played in court today:

Ambrin: I’m very hesitant… to distribute this report because this report is not finalised.

Ali: And then we have to go through it, sir, 24 hours only. There will be some changes as we agreed. So, anyway, original one “dah tak boleh pakai” (can no longer be used). We need to shred every piece of it. I don’t know how many had been printed. So there shouldn’t be that there is another copy available anywhere… because there shouldn’t be people showing us two versions and all.

Arul Kanda: If I have to, I will work overnight. “Pagi esok” (Tomorrow morning), first thing, “saya akan ke” (I will go to the) office puan (Saadatul Nafisah of the National Audit Department) and sit down with her.

Beside Ali, Ambrin and Arul Kanda, others at the meeting were Ali’s senior private secretary Norazman Ayub, Saadatul, Attorney-General’s Chambers representative Dzulkifli Ahmad, Treasury department representatives Mohamad Isa Hussain and Asri Hamdin, and Najib’s principal private secretary Shukry Mohd Salleh.

Ali confirmed their identities in the audio recording to the court today.

The recording showed that the meeting resolved to remove four matters from the 1MDB audit report.

They were – the two conflicting versions of the 1MDB financial statements for 2014; the agreement between Country Groups Securities Thailand and Acme Time Ltd; any mention of Low Taek Jho, commonly known as Jho Low; and the delay in the RM5 billion Islamic medium term notes issuance.

Parts of the audio recording were not entirely clear.

Arul Kanda was heard mentioning Dr Mahathir Mohamad, as well as then Petaling Jaya Utara MP Tony Pua, who was described as “spinning” the 1MDB audit report “the wrong way”.

Ali suggested that a forum be held on the 1MDB audit report to “let out some frustration”, to which Ambrin replied: “Tak payahlah (There’s no need).”

On how 1MDB documents found its way to several newspapers that broke news of the scandal, Arul Kanda said: “We don’t know who leaked it.”

Prior to the discussion on destroying copies of the 1MDB audit report, Arul Kanda was heard voicing his disapproval on various matters in the report.

He described some matters in the report as hearsay.

“My humble suggestion is that we should lodge a report and let the police investigate,” Arul Kanda said at one point.

Ambrin said there were two versions of 1MDB’s 2014 financial statement and insisted that the conflicting version shall not be included in the audit report.

He also asked for a police investigation to be conducted.

Ali also called for an external investigation into 1MDB’s finances: “We don’t want people who committed wrongdoing to escape. We want someone to investigate or the A-G (attorney-general) to charge.”

“We are not here to do the investigation, we are here to report the facts sahaja (only).”

Ali instructed Isa, from the Treasury, to lodge a police report over the two conflicting versions of the 2014 financial statements.

Isa also promised to form a special committee to follow up on the issue, after which Ambrin agreed to remove any mention of the matter from the 1MDB audit report.

However, during his examination-in-chief yesterday, Ali confirmed that no such police report was ever lodged.

A newly printed audit report was ready by March 3, Ali testified.

When questioned by senior deputy public prosecutor Gopal Sri Ram, Ali said he did not know if the order to destroy the copies was carried out.

“The decision was undertaken at the meeting held on February 24, 2016. It was suggested in that meeting. Whether it was done or not, I don’t know.”

On why he suggested their destruction, Ali said: “Because the conclusion at the end of the meeting, they said there shouldn’t be two or three versions. Whatever version that was agreed upon should stand alone.”

Sri Ram: During the meeting, you said the decision was made in the name of national interest. When you speak of national interest, what were you referring to?

Ali: The well-being and reputation of the country. How would the reputation of the country be affected? If it’s all truth, it can proceed, but there were some arguments (that it was not true), so we had to make sure everything was the truth.  

The prosecution, led by Sri Ram, did not identify who made the audio recording.

Ali earlier testified that minutes of the meeting were not formally recorded.

Najib’s lead defence counsel Muhammad Shafee Abdullah said his team will challenge the admissibility of the audio recording.

“We have tried to check the recording and the transcript, kindly provided yesterday.

“I thought the transcript was very bad. It is in fact hopeless. We found at least 60 mistakes and omissions, and areas that make no sense.”

Najib sat with Arul Kanda in the dock today.

Arul Kanda is represented by lead defence counsel N. Sivanathan.

The trial, before Kuala Lumpur High Court judge Mohamed Zaini Mazlan, continues. – November 20, 2019.