Former A-G tells court she was shocked at orders to ‘amend’ 1MDB audit report and ‘destroy original copy’

KUALA LUMPUR, March 30 — Tan Sri Madinah Mohamad told the High Court today that she first learnt that the audit report on 1Malaysia Development Berhad (1MDB) had been tampered with in March 2017 after taking over as the new auditor-general.

Madinah, who was the auditor-general from February 2017 to February 2019, is the 12th prosecution witness in the joint trial of former prime minister Datuk Seri Najib Razak and former 1MDB CEO Arul Kanda Kandasamy over the tampering of the 1MDB audit report.

She said she was shocked to learn that her predecessor Tan Sri Ambrin Buang had been given orders in 2016 to amend the 1MDB audit report before it was to be given to Parliament’s Public Accounts Committee (PAC), and that an official in the audit team was told to “destroy” all copies of the original report.

Madinah added that she did not seek to find out back in 2017 who had given Ambrin those orders.

In her testimony today, Madinah explained how she came to know in March 2017 of the first version of the finalised audit report, which she described as the “original copy”.

Madinah said Datuk Nor Salwani Muhammad (who was the 1MDB audit team’s coordinator and is now the deputy auditor-general) had in March 2017 showed two copies of the audit report to her just before she was to be briefed by the National Audit Department’s 1MDB audit team on the report that had been given to the PAC.

She described the first as the “original copy” while the second copy was the “amended copy”.

There was only one copy of the “original” 1MDB audit report left with the National Audit Department, as Nor Salwani had kept it despite being told to destroy all such copies.

Madinah added that she believed the rest of the 1MDB audit team did not know about the existence of this surviving original copy.

She related that she took note after being told briefly by Nor Salwani about the original copy and what had happened but set it aside as she went into the meeting room to be briefed about the amended copy. The amended copy was the one that had been given to the PAC in March 2016.

Under questioning from Najib’s lead defence lawyer Tan Sri Muhammad Shafee Abdullah about her reaction to this discovery, Madinah said she was shocked.

“I was shocked because I had no idea there were two copies, and I was shocked when she said that Tan Sri Ambrin Buang had orders to amend, and she had orders to destroy all of the printed copies, but she kept one under her chair,” Madinah said, referring to Nor Salwani in the second pronoun.

“I was shocked that Tan Sri Ambrin Buang was instructed to amend the original copies and Salwani was instructed to destroy all the copies that were meant to be tabled to the PAC,” Madinah clarified.

Shafee then asked if Madinah had an idea who could be behind the amendments to the 1MDB audit report or “who’s the culprit if there was one”.

“No, of course not, because as I mentioned to you earlier, the officers were waiting in the meeting room. So she perhaps took more than 15 minutes to talk to me, and she said ‘Tan Sri Ambrin was instructed to amend and then I was instructed to destroy’. I did not ask her who asked Tan Sri Ambrin all, because they were waiting,” she replied.

Madinah said she received a full briefing in 2018 regarding the amendment of the 1MDB audit report, explaining that she did not take further steps on the matter before that as there were no further activities that required action in her role as auditor-general.

Asked by Shafee, Madinah confirmed she did not do anything about the original copy until the new government came in in 2018, explaining however that she kept it locked in her office as it was a classified document.

“In March, when I was told about the existence of the original copy and I had to then shorten my conversation with Salwani because I had to go into the briefing, after that I had kept the original copy with the amended copy in a proper safe cabinet, because it was under OSA (Official Secrets Act) at that time. So as you know, under OSA, means we are not at liberty to divulge anything or share whatever, so it was under lock and key for that duration,” she said.

With the amended copy already tabled to the PAC in 2016 and as the 1MDB audit report was under OSA, Madinah explained that she was also not briefed in detail about the contents of the original copy and had no reason to “deep dive” into the audit report as there was no further action or activity required by the auditor-general on the report by then.

Asked by Shafee if she had ever confronted Najib who was prime minister then on “whether he was giving any instructions in relation to the 1MDB audit report”, Madinah replied: “No, I didn’t.”

Later, in the afternoon, however, when asked if she knew who had given directions for the original audit report on 1MDB to be amended, Madinah cited various individuals as being involved.

“I was informed, the meeting was held, in KSN’s (chief secretary to the government) meeting, overseen by Arul Kanda, upon the instruction from PM, and Arul Kanda went through each page and instructed Tan Sri Ambrin and the team which paragraph to drop and it went on like that,” she said.

The finalised audit report on 1MDB was initially scheduled to be presented to the PAC on February 24, 2016, but was rescheduled to March 4, 2016 as a meeting chaired by then chief secretary to the government Tan Sri Ali Hamsa on February 24, 2016 resulted in amendments to the audit report before it was given to the PAC.

As for working papers or drafts for audit reports, Madinah said it was the tradition in the National Audit Department to keep all drafts and said they were not destroyed as they were needed for reference.

Madinah stressed that drafts of the auditor-general’s report were never given in full to those being audited, during her tenure as auditor-general and based on what her National Audit Department officers told her.

“Since assuming the position of auditor-general and during the briefings given to me, draft auditor-general reports are never given in its entirety to anyone — to the KSU (secretary-general) of any ministry or to the CEO of any GLC (government-linked company) or to any of the auditees, let alone to ministers,” she said.

While Shafee had sought to suggest that the finance minister was also part of the auditee 1MDB — as its sole shareholder was the Finance Ministry’s Ministry of Finance Inc — and would be interested to know the state of affairs of the 1MDB audit report, Madinah disagreed.

“I think that’s stretching it a bit too far because the auditee is actually the company or the entity with the defined prescriptions so we do not stretch it to involve stakeholders and the like, then you can go up really high,” she said.

Madinah also stressed that the original report which Nor Salwani gave was not a mere “draft”, but was the “final report” that was printed for tabling to the PAC.

In explaining an audit process, Madinah said the NAD would complete its audit and the auditor-general would then sign off on a letter to highlight all flagged issues to give the auditee an opportunity to respond.

After the auditee provides the response, an exit conference would be held and is the final stage of the audit process before the audit report is printed, and with the auditee being able to raise any clarifications.

“So exit conference is the closure and once the exit conference is done, the auditor-general signs off and the audit report is prepared, there are no more amendments or changes that will be entertained,” she said.

Following news reports on May 14, 2018 of then prime minister Tun Dr Mahathir Mohamad saying that the 1MDB audit report was to be declassified, Madinah confirmed she had then on the next day declassified the report in order to brief Dr Mahathir on the matter.

Najib and Arul Kanda were charged in December 2018 over the alleged tampering of the 1MDB audit report.

In this trial, Najib is charged with abusing his position as prime minister and finance minister to receive self-gratification in the form of protection from civil or criminal action regarding his role in handling 1MDB’s operations, by ordering amendments in February 2016 to the auditor-general’s audit report on 1MDB before it was presented to Parliament’s Public Accounts Committee.

Arul Kanda was charged with abetting Najib in the tampering of the 1MDB audit report.

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