1MDB audit report trial: Arul cooperative but didn’t provide all info needed to audit team

Danial Dzulkifly
Former audit performance director, Saadatul Nafisah Bashir Ahmad, arrives at the Kuala Lumpur High Court January 16, 2020. — Picture by Miera Zulyana

KUALA LUMPUR, Jan 16 — Despite being described as cooperative and approachable, former 1Malaysia Development Berhad Chief (1MDB) executive Arul Kanda Kandasamy did not provide federal auditors with all the information that they requested and needed to complete their audit, the High Court heard today.

Testifying against Datuk Seri Najib Razak and Arul Kanda in their joint trial for allegedly tampering the 1MDB audit report, Saadatul Nafisah Bashir Ahmad, who led the National Audit Department’s (NAD) special 1MDB audit team, said the former 1MDB chief executive had often promised to provide the requested information to her team but certain details never materialised despite the auditors waiting for months on end.

Saadatul was under cross-examination today by Najib’s lawyer Tan Sri Shafee Abdullah who had quizzed her on whether NAD had carried out the audit in accordance to best practises and standards.

Saadatul then expressed her frustration that NAD was never provided adequate information by Arul Kanda and 1MDB, and in order to to complete the audit, it had resorted to referring to third parties for additional information all the while the Public Accounts Committee (PAC) was pressuring the department to release the audit final report.

“Tan Sri [Shafee Abdullah], we had asked for information which they didn’t provide. The auditee (1MDB) also didn’t provide the information in an intelligent way and when we started the auditing process, we asked for information, month after month we asked.

“Why must we go to a third party and PAC keep pressuring us ‘when is the report going to come out’, so I went to see Mr Arul a few times, I went to see the chairman of the board a few times,” said Saadatul, however she did not elaborate further on the identity of the chairman in question.

Saadatul said 1MDB and Arul Kanda had provided only 60 per cent of the requested information to complete their audit.

Former 1MDB Arul Kanda Kandasamy arrives at the Kuala Lumpur High Court January 16, 2020. — Picture by Miera Zulyana

Shafee then asked whether Saadatul and her audit team was “fed up” in dealing with 1MDB as they had compiled the firm’s financial history and supposedly faced a difficult time in getting information especially from the firm’s former chief executive Datuk Shahrol Azral Ibrahim Halmi, who the lawyer described as “obstructive”.

Shafee then suggested that most of the audit report consist of deals and issues that had happened prior to Arul Kanda’s tenure which started on January 5, 2015, and whether Saadatul agrees that the former 1MDB chief executive needed more time to answer to the report. 

“We gave him a year, he knows very well, Mr Arul is a very intelligent man and he can catch things very fast,” said Saadatul.

Earlier, Shafee had quizzed Saadatul whether it was standard practice for NAD to provide their auditee with a copy of their audit, which she answered in the affirmative.

Shafee also questioned why 1MDB and Arul Kanda, who was the firm’s chief executive at the time, was not given a copy of the draft copy of the audit final report.

Saadatul then explained that 1MDB was a special audit and that the report was filed under the Official Secrets Act 1972 (OSA), following a leaked of the 1MDB’s Interim audit report in July 2015 after it was presented to the Parliament’s Public Accounts Committee.

It was also the prerogative of the Auditor General to classify the audit report under OSA, said Saadatul.