Najib’s lawyer accuses 1MDB ex-CEO of covering Jho Low’s tracks by sacking auditor Ernst & Young in 2010

Datuk Seri Najib Razak leaves Kuala Lumpur High Court after his 1MDB trial May 19, 2020. — Picture by Miera Zulyana
Datuk Seri Najib Razak leaves Kuala Lumpur High Court after his 1MDB trial May 19, 2020. — Picture by Miera Zulyana

KUALA LUMPUR, May 19 — The defence in Datuk Seri Najib Razak’s 1MDB corruption trial today accused the firm’s former chief executive, Datuk Shahrol Azral Ibrahim Halmi of covering irregularities within the company, including supposed wrongdoings done by fugitive financier Low Taek Jho, following 1MDB’s decision to change financial auditors.

During cross-examination, Najib’s lawyer, Tan Sri Muhammad Shafee Abdullah had posited that Shahrol is complicit with the man called Jho Low, who had pushed for 1MDB to change their financial auditors in, Ernst & Young (EY), in 2010.

Earlier today, Shahrol had explained to Shafee that EY had raises concern over the firm’s US$1 billion (RM4.1 billion) “investment” in a joint venture with its purported business partner PetroSaudi International Limited (PSI).

EY had refused to sign on 1MDB’s annual audit report until the audit firm had information on the status of the US$1 billion that was placed in the joint venture.

Shahrol stated that 1MDB was having difficulties to provide EY the necessary documents on the Joint venture as PSI did provide proper documentation.

EY initially did not want to sign the auditor’s report on 1MDB as financial reporting standards were not met, a fact that Shahrol stated he had raised to former prime minister Datuk Seri Najib Razak then, verbally but not in writing.

A decision was made then by 1MDB board to replace EY with another top audit firm, KPMG in 2010, said Shahrol.

Shahrol: I disagree

Shafee: My suggestion, you blamed EY instead of yourself and the JV co which you ought to have exposed their fraud at the earliest stage because you were protecting PSI

Shahrol: I disagree

Shafee: you were also protecting Jho Low, that’s how 1MDB suffered losses in this particular joint venture

Shahrol: I disagree

Shafee then again pressed Shahrol that he had decided “to sweep everything under the carpet” and acting on behalf of Low as the chief executive to by changing the auditors because EY had asked “too many questions”, which the latter denied.

EY was replaced in 2010, without ever signing off on 1MDB’s accounts.

The sovereign wealth fund later hired KPMG to conduct audits on its accounts, which it did for the year 2010, 2011 and 2012, however, it was signed off without qualification.

Another top audit firm, Deloitte had audited 1MDB books for 2013 and 2014 but quit in 2015. The audit firm had also signed off the accounts without any qualification.

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