Auditors get 60% of information on 1MDB after months of delay, witness says

Former 1MDB CEO Arul Kanda promised the auditors to provide information but it never came through


1MALAYSIA Development Bhd (1MDB) was not being “cooperative” during the audit process and only supplied 60% of the information requested, according to a witness.

In the 1MDB audit report tampering trial, a former audit director of the National Audit Department (NAD) testified that the agency had waited for months to get information from 1MDB, resulting in it having to resort to third parties for facts.

Saadatul Nafisah Bashir Ahmad told the Kuala Lumpur High Court yesterday that former 1MDB CEO Arul Kanda Kandasamy (picture) promised the auditors to provide information but it never came through.

“Arul Kanda was cooperative by saying ‘I will give this’, ‘no problem’. But I didn’t know to what extent his cooperation was. When we met him, he promised us but the information never came to us.

“He should inform us rather than make us wait for months. We only got 60% of the information we asked. It took a very long time,” the seventh prosecution witness said.

She added that the department had referred to third parties such as Bank Negara Malaysia to acquire information on 1MDB due to the company’s slow response.

Arul Kanda was accused of abetting former Prime Minister Datuk Seri Mohd Najib Razak in tampering the company’s audit report, which was then tabled to the parliamentary Public Accounts Committee for investigation.

Najib’s lead defence counsel Tan Sri Dr Muhammad Shafee Abdullah, however, questioned NAD’s action of not giving Arul Kanda the audit report when he requested it, claiming the agency denied the auditee’s rights to verify and provide an explanation.

Saadatul Nafisah in response said the document was classified under the Official Secret Act 1972, while 1MDB also had the chance to provide answers to the issues raised in the audit during an exit conference in December 2015.

Arul Kanda asked for a copy of the audit report during the “coordination meeting” on Feb 24, 2016, which was chaired by the former Chief Secretary to the Government Tan Sri Dr Ali Hamsa.

The meeting was pivotal in the tampering of the 1MDB audit report and a transcript of an audio recording of the discussion, which was secretly taped by Saadatul Nafisah’s former subordinate Nor Salwani Muhammad.

The tape is now a key exhibit in the trial.

Nor Salwani previously testified that she was not allowed to be in the room and subsequently slid a voice recorder in a pencil case belonging to Saadatul Nafisah.

Despite no apparent coercion from Ali based on the transcript, the witness said the understanding for the NAD to drop certain issues raised in the audit report was “indirect”.

Former Auditor-General Tan Sri Ambrin Buang previously testified that he felt cheated after removing issues on the audit report as no action was taken on the matter, despite promises made by Najib.

The sixth prosecution witness told the court that Najib requested the omission of the audit findings on 1MDB’s two conflicting financial records as the latter promised to get the authorities to investigate it.

The coordination meeting also deliberated other issues including the delay of Islamic medium-term notes issuance and the involvement of Low Taek Jho, or Jho Low, in a board meeting despite having no position or role in the company.