Arul Kanda suggested probe into conflicting 1MDB financial reports, court told

Nor Salwani Muhammad said she placed an audio recorder in the pencil box of her superior to secretly record a meeting.

KUALA LUMPUR: Former 1MDB CEO Arul Kanda had suggested that a police report be lodged for an investigation into two conflicting financial reports on the troubled firm, after the issue was brought up during a meeting in late 2015 between him and the National Audit Department (NAD), said a witness testifying at the 1MDB audit tampering trial today.

“It is not our business to report for a probe to commence,” NAD director Nor Salwani Muhammad told the High Court when cross-examined by Arul’s lawyer N Sivananthan.

Earlier, former chief secretary to the government Ali Hamsa had told the court that Arul had only brought up the conflicting financial reports at another meeting on Feb 24, 2016.

This led to the two different versions of the financial report, among other things, to be removed from the 1MDB Audit Report before being presented to the Public Accounts Committee in March 2016.

Nor Salwani said the Dec 16 meeting was recorded and later transcribed.

“The recording may not be there anymore, once the proceedings were confirmed, but the written minutes will be there,” she said.

Sivananthan: Did you supply the minutes to the Malaysian Anti-Corruption Commission investigating officer.

Nor Salwani: Maybe, but I will have to check.

The lawyer then told trial judge Mohamed Zaini Mazlan that the prosecution did not supply that document to his client in preparation for his defence.

Former 1MDB CEO Arul Kanda arriving at court today.

Arul Kanda is charged with abetting former prime minister Najib Razak in tampering with the 1MDB audit report before it was tabled before the PAC.

Sivananthan said the draft audit report that was discussed on Dec 16, 2015 contained only 250 pages while another 100 pages were added when a second meeting was held on Feb 24, 2016.

Nor Salwani said this came about as investment affairs relating to SRC International, a subsidiary of 1MDB, were subsequently included.

Sivananthan: Can we conclude that the Feb 24, 2016 meeting was another exit conference before the audit report was presented to the PAC?

Nor Salwani: No.

She agreed that it was Ali who brought out for discussion several controversial paragraphs in the audit report during the Feb 24 meeting.

On Tuesday, the court heard that Najib was unhappy with the contents of the 1MDB audit report as he did not want the two conflicting financial statements mentioned.

Ali said the then-prime minister had summoned him to his office two days earlier (Feb 22) to inform him of his concern and that of the then auditor-general Ambrin Buang.

Earlier, during examination-in-chief by ad-hoc prosecutor Gopal Sri Ram, Nor Salwani, the fifth witness, said she recorded the proceedings of the Feb 24 meeting without approval.

That meeting was attended by Arul, representatives of NAD, the Treasury, the Attorney-General’s Chambers, the Prime Minister’s Office and Ali’s senior private secretary.

Nor Salwani said she placed an audio recorder in the pencil box of her superior, Saadatul Nafisah Bashir Ahmad, before she was suddenly asked to leave the meeting room.

“The audit team was shocked after going through the recording later,” she said, adding that Ambrin also looked upset after the meeting.

She said Ambrin mumbled something to the effect “what is the purpose of doing an audit”, when she followed him to the washroom.

Nor Salwani said the recording was first transferred to a hard disc. It was later put into another hard disc and then to a pen drive.

“We did this to prevent leakage of information at the height of the 1MDB crisis. The pen drive was later handed over to the MACC investigating officer,” she said.

Cross-examined by Najib’s lawyer Muhammad Shafee Abdullah, she said she put the recorder in Nafisah’s pencil case without her permission because the notice to leave the meeting room came unexpectedly from Ali’s staff.

She told the lawyer that the information was finally put in a pen drive and kept in a safe because there was action by the authorities to seize classified matters in relation to 1MBD.

“This is what happened to MACC when documents were confiscated from them,” she added.

Hearing before Zaini adjourned to Wednesday.