‘Upset’ Najib ordered 1MDB audit report changes to hide two different financial statements, Ali Hamsa confirms

Former chief secretary to the government Tan Sri Ali Hamsa is pictured at the Kuala Lumpur High Court November 19, 2019. Picture by Firdaus Latif
Former chief secretary to the government Tan Sri Ali Hamsa is pictured at the Kuala Lumpur High Court November 19, 2019. Picture by Firdaus Latif

KUALA LUMPUR, Nov 19 ― Datuk Seri Najib Razak directly ordered amendments to be made to the 2016 Auditor-General's (A-G) report on 1Malaysia Development Berhad (1MDB), former chief secretary to the government Tan Sri Ali Hamsa told the High Court today.

Testifying at the Pekan MP’s trial for allegedly tampering with the federal audit report, Ali related that he was called by Najib to the Prime Minister's Office on February 22, 2016 for a meeting ― the first of a series of other meetings that resulted in changes to the A-G’s 1MDB report that was later presented to Parliament’s Public Accounts Committee.

Ali said he was not alone when meeting Najib who was both pime minster and financial minister then. Tan Sri Ambrin Buang who was the A-G at that time was present.

The retired chief secretary remembered Najib saying he did not want the audit report to include mention that 1MDB had two different financial statements for the financial year 2014.

“During that meeting, Datuk Seri Najib informed Tan Sri Ambrin Buang and I that the purpose of the meeting was with regards to the 1MDB audit report which was to be presented to the Public Accounts Committee on February 24, 2016.

“Datuk Seri Najib said that he was not satisfied with the contents of the report,

“Datuk Seri Najib mentioned that he did not want two different financial statements for 1MDB to be submitted in the 1MDB audit report,” said Ali, now 64.

Asked by the lead prosecutor to describe how Najib looked during that first meeting, Ali said: “Knowing him, directly dealing with him since 2009, I noticed that time on that day he looked a little upset”.

Ali said he had first came to know of problems regarding the Finance Ministry-owned 1MDB back in 2014 from social media, adding that Najib had told him that the news regarding 1MDB were "not substantiated".

"When a lot of things were being said in social media, I did ask the then prime minister whether will there be any meeting of the advisory board of 1MDB. So he said this is not, we haven't reached to that stage, so whenever there's a need, we will call for a meeting," Ali said, referring to Najib who was also chairman of 1MDB's board of advisers in addition to being the prime minister and finance minister then.

Ali, who was a member of 1MDB's board of advisers until its subsequent dissolution, said he was never asked to attend any meeting and had never signed any documents in such a capacity.

Ali is the fourth prosecution witness testifying against Najib in a joint trial with former 1MDB CEO Arul Kanda Kandasamy.

Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court November 19, 2019. — Picture by Firdaus Latif
Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court November 19, 2019. — Picture by Firdaus Latif

In this trial, Najib was charged with abusing his position as prime minister and finance minister to order amendments in February 2016 to the auditor-general’s audit report on 1MDB before its finalisation and[a] presentation to Parliament’s Public Accounts Committee to avoid any civil or criminal action against him, while Arul Kanda was charged with abetting Najib in the report’s tampering.

Both their offences are punishable under the Malaysian Anti-Corruption Commission (MACC) Act 2009 with a maximum 20-year jail term, and a fine of at least five times the amount of gratification or RM10,000 or whichever is higher.

Today, Ali referred to the same February 22, 2016 meeting, where he said Najib had instructed him to conduct a coordination meeting between 1MDB's Arul Kanda and the National Audit Department to resolve dissatisfaction about the 1MDB audit report.

"I was also instructed not to print the 1MDB Audit Report until I have his (Najib's) approval. At that time, I did not have any knowledge about the status of the 1MDB Audit Report, whether it has been finalised or not," Ali said, adding he had never viewed the report and was never involved in the National Audit Department's audit process on 1MDB.

Having arranged for the February 24, 2016 meeting that eventually resulted in the removal of four items including 1MDB's two conflicting 2014 financial statements and an incident involving Najib, Ali today said he had thought the meeting would be a typical audit exit conference meeting.

Ali explained that ministries audited by the auditor-general would usually have an audit exit conference to highlight changes or efforts that they had undertaken to rectify issues detected during the federal audit.

Ali confirmed that the February 24, 2016 meeting to discuss the 1MDB audit report changes would not have taken place without Najib's direction to do so.

Ali also spoke of how an aide to Najib had described the 1MDB audit report as a "crisis" to be immediately handled, and also of how the aide had asked for changes to the report that were later carried out by the then auditor-general Ambrin after the February 24, 2016 meeting.

Ali said the National Audit Department (NAD) had on February 29, 2016 given his office an updated draft of the 1MDB audit report which he did not read and did not remove from its envelope.

Ali also said that the NAD had then on March 3, 2016 delivered a printed copy of the “new” 1MDB audit report, adding that he had then instructed his senior private secretary Datuk Norazman Ayob to keep the document in a safe as it was still “embargoed”.

The trial before High Court judge Mohamed Zaini Mazlan resumes tomorrow morning.

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