VIPs In The Dock: 1MDB audit tampering case

TheEdge Tue, Jan 07, 2020 05:00pm - 4 years View Original


AFTER many attempts by the defence to delay the case, the 1MDB audit tampering trial involving former prime minister Datuk Seri Najib Razak and former 1MDB CEO Arul Kanda Kandasamy commenced on Nov 18, 2019.

The former premier is accused of obtaining gratification in the form of avvoiding civil of criminal liability by ordering amendments to the audit report while it was being prepared.

The amended report was submitted to parliament’s Public Accounts Committee (PAC) on March 4, 2016.

The charge, under Section 23(1) of the Malaysian Anti-Corruption Commission (MACC) Act 2009, provides for up to 20 years’ jail and a fine of not less than five times the amount of the gratification, or RM10,000, whichever is higher, upon conviction.

Arul Kanda is charged with abetting Najib in using the latter’s position as then prime minister to order the report’s amendment. The charge, under Section 28(1)(c) of the MACC Act, read together with Section 23(1) & 24(1) of the Act, provides for a similar sentence, if found guilty.

The prosecution had earlier indicated that there would be up to 40 witnesses who will testify in the case.

One of the first few key witnesses, former Chief Secretary to the Government Tan Sri Ali Hamsa, testified that he had called up for the fateful “coordination” meeting on Feb 24, 2016, after Najib complained that he was not happy with the contents of the 1MDB audit report and wanted it sorted out.

“The purpose of the meeting was for the 1MDB audit report as he (Najib) was not satisfied with the contents of the report,” he said, adding that he did not know at that time what the problem with the audit report was.

“Najib instructed me to hold a coordination meeting between the National Audit Department (NAD) [and] former 1MDB CEO Arul Kanda Kandasamy and other officers,” he said.

The coordination meeting was also attended by representatives from the Attorney-General’s Chambers and the Prime Minister’s Office.

Representing 1MDB at the meeting was Arul Kanda; from the NAD was then Auditor-General of Malaysia Tan Sri Ambrin Buang and Saadatul Nafisah; Datuk Seri Mohamad Isa Hussain and Asri Hamdin represented the Treasury; Datuk Dzulkifli Ahmad represented the Attorney-General’s Chambers; and the Prime Minister’s Office was represented by Tan Sri Shukry Mohd Salleh.

As a result of what transpired at that meeting, passages in the report that caused concern to Najib were amended or removed. There were four material contradictions or missing paragraphs, as stipulated in the charge sheet.

These include the meeting between Najib and Sultan Mizan Zainal Abidin, the Sultan of Terengganu and then-Yang di Pertuan Agong, on May 27, 2009, where the ex-PM agreed to postpone the RM5 billion Islamic Murabahah term notes (IMTN) programme for further evaluation by the Special Monitory Committee.

However, the postponement was not relayed to the Cabinet, although the ministers had met on the same day, resulting in the IMTN being issued.

In the amended report, Najib’s involvement in the IMTN was not mentioned at all. Instead, it said that the decision of TIA’s then-CEO Datuk Shahrol Azral Ibrahim Halmi to go ahead with the issuance of the notes caused him to lose his directorship of the fund. However, Shahrol was then reappointed on the same date, through a TIA directors’ resolution.

Next, the omission of the information about pressure from TIA’s special adviser Low Taek Jho on the issuance of the IMTN. It was stated that 1MDB’s CEO told a board meeting on Oct 10, 2009, that the IMTN issuance had to be accelerated, as demanded by TIA’s special adviser, in order to jointly develop Pulau Bidong with Mubadala Investment Company.

In the amended report, details of the arrangements with CGS and Acme Time were also taken out. Instead, the report merely stated that the IMTN was a “bought deal” in which AmBank, as lead arranger and primary subscriber, had obtained secondary market subscription for the issuance of this debt paper.

The charge sheet also states the removal of a note pointing out the existence of two versions of 1MDB’s financial statements for the year ended March 31, 2014 — the one submitted to the Companies Commission of Malaysia (SSM) and another one for the financial institutions that loaned money to the 1MDB Group.

The Auditor-General stated in its audit report that it found “some differences between the 1MDB financial statements submitted to SSM and a copy of the financial statements submitted to MoF Inc and financial institutions”. These were all removed from the document.

Another portion that was removed was Jho Low’s attendance at a special board meeting of 1MDB on Sept 26, 2009, when 1MDB’s transfer of US$1 billion to its joint venture company with PetroSaudi International Ltd, called 1MDB PetroSaudi Ltd, was approved, of which US$700 million was subsequently siphoned off to Good Star Ltd, a unit linked to Low.

The AG said Low’s attendance was not recorded in the meeting minutes provided to them, but an investigation at 1MDB’s office building on April 15, 2015, found that another set of minutes had recorded Low’s attendance.

All these allegations were supported by one key piece of evidence: an audio recording of the whole meeting. NAD director Nor Salwani Muhammad testified that she secretly slipped a digital voice recorder into the pencil case of her superior after being told to leave the meeting room. There was a recording of the decisions taken to remove portions of the audit report. Nor Salwani Muhammad said the audio recording was for NAD’s internal use for the purpose of taking minutes.

The trial was adjourned on Nov 28 to make way for Najib’s other trials. The case will resume tentatively on Jan 13 to 16, 2020, with High Court Judge Mohamed Zaini Mazlan also fixing additional days from March 9 to 11, April 6 to 9 and April 13 to 16 as tentative hearing days.

 

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