Original audit report would have been tabled to PAC if not for Feb 26 meeting, Arul Kanda tells court

The Kuala Lumpur High Court today heard that the original 1MDB audit report bearing the “09” watermark would have been sent to the Public Accounts Committee (PAC) if the Feb 24, 2016 meeting had not taken place.

Former 1MDB CEO Arul Kanda Kandasamy, 46, said he received a telephone call from then prime minister Najib Razak a day before the meeting, telling him to attend the said meeting.

Previously, former auditor-general Ambrin Buang testified that the initial special 1MDB audit report bearing the “09” watermark had already been completed by Feb 24, 2016 and would have been submitted to PAC, if not for requests for amendments made by Najib.

Questioned by senior deputy public prosecutor Gopal Sri Ram, Arul Kanda said there were a number of reasons given by Najib for why he needed to attend the meeting.

“Among them was to defend the interest of the company, and regarding the scope of the audit of the National Audit Department (NAD) verifying the accounts of 1MDB. He had some concerns that the contents of the report could be spun from a political perspective,” said Arul Kanda.

Asked by Sri Ram whether Najib’s telephone call had influenced him when he attended the meeting, Arul Kanda said what he understood from the call was that Najib was concerned that the 1MDB audit report might be “spun politically”.

Sri Ram: Spun to whose detriment?

Arul Kanda: To my understanding, it was to the detriment of Najib.

Sri Ram: We have had evidence from witnesses from the NAD whereby, if not for the 24th meeting, the 1MDB audit report Watermark 09 (original copy of the audit report) would have gone to PAC. Do you agree?

Arul Kanda: Yes

Previously, the court heard that a government auditor, Nor Salwani Muhammad, had saved one last copy of the audit report’s draft within the NAD custody despite being told to destroy all copies of the report.

Meanwhile, another witness, former auditor-general Madinah Mohamad, testified that she decided not to destroy the original copy which was given to her by Nor Salwani, as it contained material evidence on the sovereign wealth fund.

She said that following the change of government from Barisan Nasional to Pakatan Harapan in 2018, she had handed copies of the “09” watermarked 1MDB audit report to the then Council of Eminent Persons, the police and the Malaysian-Anti Corruption Commission (MACC).

This copy became one of the central pieces of evidence used by the prosecution in the audit report case against Najib and Arul Kanda.

When cross-examined by Najib’s lawyer Muhammad Shafee Abdullah, Arul Kanda said during the audit process he himself had faced a lot of difficulties like getting the documents from the management of 1MDB.

Shafee: Did you brief the matter to Najib?

Arul Kanda: That time, I didn’t have any specific issue that I could highlight or point out, whether in terms of fraud or mismanagement. But I had general concern and that concern was triggered by articles and news reports. I felt that further investigation was required, and in fact, I suggested to Datuk Seri to bring in an independent third party, in this case, Jabatan Audit Negara to conduct a review.

Shafee: What was the PM’s (Najib’s) reaction?

Arul Kanda: When we had the discussion, he said he would take it into consideration. He didn’t say yes or no. Within a week or two, there was an announcement made by NAD asking us to verify the accounts of 1MDB.

Arul Kanda was testifying as a prosecution witness in the trial of Najib for allegedly tampering with the final 1MDB audit report, after the court allowed the prosecution’s application to call him as a witness.

Najib is charged with using his position to order amendments to the final 1MDB audit report before it was presented to PAC to avoid any action being taken against him.

Arul Kanda is charged with abetting Najib in making the amendments to the report, to protect Najib from being subjected to action.

Arul Kanda remains a co-accused.

The trial before judge Mohamed Zaini Mazlan continues on July 4.