PAC The Finance Ministry (MOF) appears unaware that KPMG's appointment as 1MDB's auditor was terminated by Finance Minister Najib Abdul Razak, according to the Public Accounts Committee's records.

During a PAC hearing on 1MDB on June 16, 2015, MOF's cabinet and parliament unit chief Rosli Yaakub told the committee that the ministry was not involved in the appointment of 1MDB auditors.

The next day the committee received confirmation from KPMG that it had been sacked while auditing 1MDB accounts via a letter from 1MDB signed by the finance minister.

Finance Ministry Inc (MKD) chief Mohamad Isa Hussain is recorded in the Hansard as saying he was "not sure" about the letter when asked by then-PAC chairperson Nur Jazlan Mohamad about it.

"I have said earlier the whole thing is not coming to MOF," Mohamad Isa added, referring to the ministry being kept in the dark on 1MDB's operations.

The Hansard then shows that there was initial confusion over who was the finance minister who signed the termination letter, as KPMG did not bring a copy of it to the hearing.

PAC member Tony Pua, however, confirmed with Malaysiakini that the PAC had later been shown that the letter was signed by Najib himself.

KPMG had been removed because it asked too many questions and would not sign off on 1MDB's accounts.

However, during its three-year stint with 1MDB, the auditing firm had among others deemed in October 2010 that PetroSaudi International (PSI) was in good financial standing to guarantee loans, based on two letters.

KPMG said the letters, from Swiss firm Helvetica Asset Management and Saudi bank Banque Saudi Fransi, had confirmed that Prince Turki of Saudi Arabia and Tarek Obaid were PSI shareholders and their financial standing.

The letters, however, did not contain financial information on PSI itself.

KPMG had also deemed PSI to be in good financial standing based on the September 2009 Edward Morse report on the Saudi company's assets.

‘PSI no longer owned oilfield assets’

The firm, however, was not aware PSI no longer owned oilfield assets it had included as part of its US$1.5 billion share of the 1MDB-PSI joint venture, as 1MDB's management had assured them that the assets were still good.

Neither was it aware that US$160 million from a US$500 million Murabaha Loan agreement signed between PetroSaudi and 1MDB in 2010 had gone to Jho Low-linked Good Star Limited.

1MDB's board, it said, had only approved the payment to the JV.

The US$160 million is only one of several transactions from 1MDB that ended up in Good Star.

Earlier in 2009, a US$700 million payment was made to Good Star from the US$1 billion meant for the 1MDB-PSI JV, without the board's approval.

Former 1MDB CEO Shahrol Azral Halmi, however, justified this by saying that PSI had confirmed that it owned Good Star.

"We have a letter confirming from PSI that this is their company," Shahrol said on Nov 25.

Low has denied links to Good Star, and that he used the company to siphon money from the 1MDB-PSI JV.