Najib called meeting to remove parts of 1MDB audit report: Ali Hamsa

AUDIT TAMPERING TRIAL | Former prime minister Najib Abdul Razak had instructed for a meeting to be held to discuss removing certain portions of 1MDB audit report, the High Court in Kuala Lumpur was told today.

In his testimony, former chief secretary to the government Ali Hamsa confirmed that the meeting was called by Najib.

Ali, who served as the chief secretary to the government from 2012 to August 2018, was called as the fourth prosecution witness.

In the list of prosecution witnesses, Ali is listed as the sixth witness.

He confirmed Najib gave the order to hold a meeting to discuss removing certain portions of the 1MDB audit report.

Ali said on Feb 22, 2016, he was called to the Prime Minister’s Office. where he met then-premier Najib and then auditor-general Ambrin Buang.

“During the meeting, Najib informed Ambrin and me that the meeting’s purpose was regarding the 1MDB audit report to be presented before the Public Accounts Committee (PAC) on Feb 24, 2016. Najib said he was not satisfied with the report.

“Najib mentioned that he did not want two different financial statements for 1MDB to be submitted in the 1MDB audit report. At the time, I did not know what was the problem with the annual financial statement in the 1MDB audit report,” Ali said.

The witness was reading out from an English version of his 10-page Witness Statement during examination-in-chief by lead DPP Gopal Sri Ram on the second day of the trial of the 1MDB final audit report tampering case against Najib and the sovereign wealth fund’s former CEO Arul Kanda Kandasamy.

As he sat reading out his testimony from the witness stand, Ali told the Kuala Lumpur High Court that despite him being a member of 1MDB’s board of advisors at the time, he was never called to attend any related board meeting.

He said not only he never signed any documents in his capacity as a member of 1MDB’s board of advisors, but that he was never involved in any 1MDB audit process by the National Audit Department (JAN), and that during the meeting, he had never even read the 1MDB audit report which Najib meant.

“After that discussion, I was instructed by Najib to conduct a coordination meeting between JAN and Arul Kanda (above), who represented 1MDB with regards to any dissatisfaction in the 1MDB audit report by JAN.

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

Ali said after meeting Najib, he returned to his office and instructed his senior private secretary to organise a meeting for the 1MDB audit report on Feb 24, 2016, and to invite representatives from the sovereign wealth fund, National Audit Department, Treasury, Attorney-General’s Chambers (AGC), and the Prime Minister’s Office (PMO).

Testifying that all parties were invited to the Feb 24, 2016, meeting on his instructions, Ali said that a Treasury representative was invited because 1MDB was controlled by the Minister of Finance Incorporated (MoF Inc), and that a representative from the AGC was invited to give opinion and advice with regards to the law.

Ali said that on Feb 23, 2016, Ambrin and Najib’s then chief private secretary Shukry Mohd Salleh met the witness in his office. Ali informed the duo about the Feb 24, 2016 meeting.

“In that meeting with both of them, Shukry informed that the 1MDB audit report has become a crisis which needed to be handled immediately.

“At that time, I did not give a response. I also did not ask any further questions and only took note of what was told because the 1MDB issues were sensational at the time,” Ali said.

The witness said that the attendees of the Feb 24, 2016 meeting were Arul Kanda, Ambrin and Saadatul Nafisah from JAN, Mohamad Isa Hussain and Asri Hamdin from the Treasury, Dzulkifli Ahmad from the AGC, Shukry from PMO, and the witness’ senior private secretary Norazman Ayob.

Dzulkilfi was then part of the AGC's National Revenue Recovery Enforcement. He later became MACC chief commissioner before stepping down in May last year.

Ali said just before the meeting commenced, he informed the attendees that the meeting was held on the instructions of Najib, who wanted coordination on the 1MDB audit report, and that the witness was only a middle person to resolve issues raised by Najib which required negotiations and agreements from both 1MDB and JAN.

The witness said no minutes were recorded during the Feb 24, 2016, meeting, where discussion on issues pertaining to the 1MDB audit report took place. The issues were then addressed by Arul Kanda.

“During the meeting, Arul Kanda voiced his disapproval on various matters in the 1MDB audit report by JAN. His reason was that the matters included in the 1MDB audit report were not factual and were merely hearsay.

“Arul Kanda insisted for the 1MDB audit report prepared by the National Audit Department to be in accordance with what he wants,” Ali said.

The witness said he then asked Ambrin in regards to what Arul Kanda said, and the former auditor-general said there were difficulties faced by the 1MDB audit team throughout the audit process.

Ali said Ambrin (below) raised the issue of two different versions of 1MDB’s financial statements for 2014, to which Arul Kanda admitted there were two different versions of the statements.

“He (Arul Kanda) insisted that the conflicting versions shall not be included in the 1MDB audit report and asked for a police investigation to be conducted.

“It was agreed, at the meeting, that MoF Inc would lodge a police report. I instructed Isa Hussain (the Finance Ministry’s then deputy secretary-general (investment)) to lodge a police report on the two conflicting versions of the 2014 financial statements,” Ali said.

The witness said he gave instructions to lodge a police report to ensure the authorities could investigate the presence of elements of fraud or concealment of facts in the 2014 financial statement.

Ali said that Isa, who was responsible for the MoF Inc affairs at the time, not only raised no objection to the filing of the police report, but also promised to form a special committee to follow up on the issue.

“After that, Ambrin agreed to remove this issue from the 1MDB audit report,” the witness said.

Ali said that during the Feb 24, 2016 meeting, the attendees agreed for four issues to be removed from the 1MDB audit report, namely the two conflicting versions of the 1MDB 2014 financial statements; the agreement between Country Groups Securities Thailand and ACME Time Limited; the presence of Jho Low at a 1MDB board meeting; and the delay in the Islamic Medium Term Notes (IMTN) issuance by 1MDB.

The witness said during the meeting, Ambrin agreed for the removal of the delay in the issuance of IMTN from the 1MDB audit report after Dzulkifli said the said delay was a business decision and was not necessary to be raised during the cabinet meeting.

Ali said that earlier during the meeting, Shukry had asked whether Najib was duty-bound to report the consented delay in the IMTN issuance to the cabinet after obtaining the then Yang di-Pertuan Agong’s approval, to which Arul Kanda replied that the issue of the delay was a business decision.

The witness said that earlier during the meeting, the attendees discussed Jho Low’s presence at the 1MDB board meeting which related to the IMTN bond investment.

Ali noted that Jho Low’s presence was addressed in the (unfinalised version) 1MDB audit report because JAN’s due diligence found that Jho Low did not hold any official position nor played any role in 1MDB.

“Therefore, his (Jho Low) presence was viewed as a red flag. Shukry requested for this issue to 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 point. Ambrin agreed that it should be removed,” Ali testified.

Ali also testified that earlier during the meeting, the attendees discussed the issue of the agreement between Country Groups Securities Thailand and ACME Time Limited, which were reported in the draft 1MDB audit report.

“Arul Kanda requested that this issue be removed from the 1MDB audit report as he was of the view this was out of the scope of JAN’s auditing scope since the agreement involved “secondary market” and was outside 1MDB’s involvement scope.

“I sought Ambrin’s views pertaining to the matter. He had no objections and agreed for the issue to be removed from the report,” Ali testified.

The witness said the meeting then adjourned and continued on Feb 25, 2016, in which he did not attend. The meeting was organised by his senior private secretary.

Ali said later that day (Feb 25, 2016), he had another meeting with Ambrin, Arul Kanda, Saadatul, Shukry, and Norazman (below) to finalise the issues raised in the Feb 24 meeting.

In this meeting (later that day of Feb 25), Ali testified that Arul Kanda handed over three additional documents required by JAN.

“The National Audit Department agreed to accept and include the three new documents into the 1MDB audit report,” Ali said.

The witness said later on Feb 29, 2016, he received the updated draft of the 1MDB audit report from JAN, but that he did not read it as it was not removed from the envelope.

Ali said that on March 1, 2016, a final review session of the 1MDB audit report was held at a meeting room at his office, where the audit team from JAN and a representative from 1MDB, Arul Kanda, were involved.

He said he was not involved in that final review session as he merely prepared the space for both parties to resolve issues.

“The discussion was held between the audit team from JAN and Arul Kanda only, as they were the only ones who came to my office.

“After about an hour, both parties came out of the meeting room. Arul Kanda then came to meet me in my office and complained that it was difficult dealing with the audit team. I kept quiet.

“I then informed him that it was mutual as both parties, 1MDB and the National Audit Department, had their own difficulties.

“I told Arul Kanda the audit team also faced difficulty obtaining documents when conducting the audit on 1MDB. He then left my room,” Ali said.

Ali ended reading out his Witness Statement by saying that on March 3, 2018, his senior private secretary informed him that Saadatul would come to the office to deliver the printed new 1MDB audit report.

“Seeing that the document was still embargoed, I then instructed my senior private secretary to keep the document in a safe,” Ali said.

The trial before High Court judge Mohamed Zaini Mazlan continues tomorrow.

Najib claimed trial to receiving gratification in the form of protection from ethical, civil or criminal actions against him as a public officer in relation to 1MDB, by ordering the alteration of the final audit report before it is presented to the Public Accounts Committee (PAC).

The offence is alleged to have been committed by Najib between Feb 22 and 26, 2016, at the Prime Minister’s Department in Putrajaya.

He was charged under Section 23(1) of the Malaysian Anti-Corruption Act 2009. Under Section 24 of the same Act, Najib stands to face a maximum of 20 years’ jail or a fine of RM10,000 if convicted.

Arul Kanda is facing the charge of abetting Najib in committing the offence.

Gani Patail removed as AG due to Najib losing trust

Meanwhile, during examination-in-chief by Sri Ram, Ali told the court that he handed over a letter of termination to then attorney-general Abdul Gani Patail following Najib's loss of trust in the former AG in 2015.

The witness said that upon him handing the letter to Gani, the latter remarked that he (Gani) expected this to happen.

Ali: There was no trust in Gani Patail.

Sri Ram: By whom?

Ali: By the prime minister (Najib).

Ali explained that the loss of trust arose following word coming out that then deputy prime minister Muhyiddin Yassin and Gani had met in Kuala Lumpur in 2015.

He said that this was due to the related issue of Muhyiddin then actively raising a lot of questions on 1MDB during cabinet meetings in which Najib was also present.

"When one sits in a cabinet meeting and you see the argument where Muhyiddin Yassin made noise in the cabinet, you know something is coming up," Ali said in relation to Muhyiddin being later removed from the cabinet in the same year (2015).

Just before proceedings adjourned today, Gopal informed the court that the prosecution will tender an audio recording of one of the meetings tomorrow.

It is understood the audio recording is possible in relation to the Feb 24, 2016, meeting, where the decision was made to remove the potentially controversial issues from the 1MDB final audit report.

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