What Was Hidden From The 1mdb Audit Report

---

AUDIT TAMPERING TRIAL | Former prime minister Najib Abdul Razak has been accused of tampering with an audit on 1MDB prepared by the National Audit Department in 2016
According to DPP Gopal Sri Ram's opening statement before the High Court today, Najib was "nonplussed, if not agitated" with what the audit had discovered
"He took positive steps to have those passages altered or removed. What happened was abnormal
"Despite the fact that the report was ready to be placed before the Public Accounts Committee of Parliament, a meeting was convened on Feb 26, 2016 at Najib's behest. It was chaired by the chief secretary to the government," said Gopal

Gopal (below) said the prosecution will prove that Najib knew that if the facts were made public, he would be exposed to civil or criminal liability
This article will examine the amendments detailed in the charge sheet
Jho Low's name expunged from reportTable 7.5 of the original National Audit Department's report had stated that Jho Low attended a special 1MDB board of directors meeting on Sept 26, 2009
This was confirmed by Bakke Salleh, who chaired the board at the material time. The audit department said Bakke also furnished minutes which showed that Low was in attendance
This portion of the table did not appear in the final audit report submitted to the Public Accounts Committee
Also expunged from the same table was a note by the audit department on the corporate guarantees for the second bond issuance of USD1.75 billion for 1MDB Energy (Langat) Ltd
While the audit department's original report said both 1MDB and Abu Dhabi's International Petroleum Investment Company (Ipic) had given corporate guarantees, the final version only mentioned the latter
Discrepancies in financial statementsAccording to the charge sheet, Item 4.2 in chapter 4 of the report was completely expunged
This item detailed how 1MDB had filed different financial statements for the year ending March 31, 2014 to the Companies Commission, the company owner Minister of Finance Inc and banks
At the material time, 1MDB's auditor was Deloitte Malaysia
The audit department's recommendation in the original report was that the authorities should investigate why there were two financial statements
Audit team knew of bond flipping schemeBased on the original audit report, the team knew, as far back as 2015, of the bond flipping scheme involving the first RM5 billion bond issued to the Terengganu Investment Authority (TIA) - 1MDB's predecessor - in 2009
The original audit report detailed how Country Group Securities Public Company Ltd (incorporated in Thailand) and Acme Time Ltd (Singapore) made US$1.3 million and US$125.97 million respectively by buying the bonds at a discount and selling the bonds for a profit three days later
This matter had cropped up last month in the criminal trial against Najib in relations to 1MDB funds, where it was established that entities linked to Jho Low made RM74 million "out of thin air" by flipping the bonds
According to the original audit report, the scheme was set in motion on May 18, 2009
The amended version of the audit report does not mention the two companies
Najib's meeting with the AgungThe amended version of the audit report had expunged a sentence which read: "During the Yang di-Pertuan Agong's audience with the prime minister (who is also the finance minister) on May 27, 2009, the prime minister agreed to postpone the bond issuance in order for it to be reviewed by the special supervisory committee."For context, late-May 2009 was a tumultuous time for TIA, which had two main stakeholders - the Terengganu government and the Finance Minister Incorporated
According to former TIA CEO Shahrol Azral Ibrahim Halmi's testimony at Najib's other trial, the board of the company had ordered the management to stop the issuance of a RM5 billion bond on May 22, 2009
However, as mentioned earlier, the bond flipping scheme was already set in motion on May 18
Eventually, TIA (the predecessor of 1MDB) received only RM4.385 billion, as confirmed by the Public Accounts Committee in 2016
 - Mkini

---