KUALA LUMPUR, Jan 16 — The auditor-general and his team came under pressure during a February 2016 high-level meeting chaired by the then chief secretary of the government Tan Sri Ali Hamsa to remove information from the final audit report on 1Malaysia Development Berhad (1MDB), the High Court heard today.
1MDB auditor Saadatul Nafisah Bashir Ahmad today insisted that the government auditors were ultimately forced to make changes to the final audit report on 1MDB — before they could present the findings to parliamentary watchdog Public Accounts Committee (PAC).
Saadatul Nafisah, who led the special 1MDB audit team under the National Audit Department, was testifying as the seventh prosecution witness against former prime minister Datuk Seri Najib Razak and former 1MDB CEO Arul Kanda Kandasamy in their joint trial over the audit report’s alleged tampering.
Quizzed by Najib’s lawyer Tan Sri Muhammad Shafee Abdullah, Saadatul Nafisah said that both she and then auditor-general Tan Sri Ambrin Buang faced coercion during the February 24, 2016 meeting to make changes to the report.
Saadatul Nafisah then highlighted an example in the transcript of the audio recording of the February 24, 2016 meeting, noting that she had at one point defended the 1MDB auditors’ inclusion of details of a bond-flipping exercise in the audit report.
She pointed out that the 1MDB auditors were made to remove mention of such information despite them merely stating out factual information.
“Ya, like this, it’s just statement of facts that we just stated. But at last, this paragraph has to be dropped because of pressure in the meeting. In the end, it was dropped,” she replied.
She noted that Ali had during the same meeting remarked on the same matter in Malay: “Bolehlah ni, AG can use discretion to drop it”.
When asked by Shafee if Ali’s remarks amounted to coercion, Saadatul Nafisah agreed that it was “coercion”, saying “If this is not dropped, it will be raised again and again”.
Shafee then asked if Ali had said something to the effect that the auditors “better drop” the content, but Saadatul Nafisah said that Ali would not have spoken like that but was indirectly pressing the auditors to make the amendments.
While noting that both she and Ambrin did not protest by directly turning down the request, Saadatul Nafisah insisted that there was an “order given by KSN for it to not be included”, saying: “If you see earlier, it is an order for it to not be included.”
In the February 24, 2016 meeting that Ali previously said he had organised upon Najib’s instruction after the latter expressed dissatisfaction with the 1MDB audit report, those in attendance included Arul Kanda, Najib’s aide Tan Sri Shukry Mohd Salleh and other senior government officials.
Following the February 24, 2016 meeting, the 1MDB auditors eventually removed four items from the 1MDB audit report as requested of them.
The almost three-hour-long audio recording of the February 24, 2016 meeting that was previously played in court had shown both Ambrin and Saadatul Nafisah repeatedly defending the contents of the audit report by pointing out those were merely factual statements as well as resisting the calls to remove information.
When Shafee noted that Ali had only said clarification would be required if there are conflicting situations presented in the 1MDB audit report, Saadatul Nafisah said Ali would not have directly made demands for information to be dropped.
The pencil case recording
When asked about the February 24, 2016 meeting that was held at Ali’s office and chaired by Ali, Saadatul Nafisah said the 1MDB auditors did not have any prior briefing about the meeting but had came fully prepared to the meeting.
“We were told KSN called for a meeting but we don’t know what the meeting is about, but it’s about 1MDB. That’s why we bring as much of our team and paperwork, because we don’t know what the meeting is about,” she said, adding that she and about six other government auditors had arrived early and were seated in the meeting room before the others arrived.
When asked by Shafee, Saadatul Nafisah said had brought a notebook to take down important notes as well as a pencil case into the meeting room with Ambrin seated to her right and 1MDB audit team coordinator Nor Salwani Muhammad seated to her left.
Saadatul Nafisah said she had placed the pencil case on the table to her left as she writes with her left hand, and that the zip may have been half open after she took out her stationery in preparation for the meeting before it started and before Ali had arrived.
“As auditors, we are always well-prepared, we always keep everything on the table before the chairman arrives...We are all well-prepared for the meeting,” she said.
When asked by Shafee if all 1MDB auditors were “chased out” of the meeting except for her and Ambrin, Saadatul Nafisah said Ali had went entering the meeting room said that there was no need for so many auditors to be present and had asked for the rest to wait outside the meeting room.
Shafee: Was it in a gentle or harsh manner or chased out?
Saadatul Nafisah: No, he didn’t chase out. Professionally, in an ordinary manner.
She confirmed that Ali had said the other auditors—other than her and Ambrin—would be called in if required.
Saadatul Nafisah confirmed that no one had told Ali of the need for Nor Salwani to remain present in the meeting room to record and take down notes, due to the sudden request for the other auditors to leave the room.
“Suddenly KSN entered, asked the officers to leave, so it’s like a sudden situation that they have to go out, it was a bit rushed, so did not manage to inform that Salwani is needed to take down notes,” she said.
She said she did not know that Nor Salwani had placed a recording device into her pencil case to record the meeting, and that Nor Salwani had only managed to inform her of this after the meeting.
Today is the ninth day of the trial before High Court judge Mohamed Zaini Mazlan.
In this trial, Najib is accused of having misused his positions as prime minister and finance minister to order for the 1MDB audit report changes to avoid civil or criminal action, while Arul Kanda is accused of having helped Najib commit the alleged offence.
No further trial dates have been fixed for this case now, as Najib is currently tentatively scheduled to be on trial for two other cases from next week onwards until October.
Zaini today also granted an order as requested by Shafee for Najib’s legal team to be provided with the notes of proceedings when Ambrin testified to the PAC in 2018 during the PAC’s inquiry on the alleged audit report tampering.
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