Only four issues removed, other red flags in 1MDB audit report maintained, court told

Former audit director of the National Audit Department (NAD) Saadatul Nafisah Bashir Ahmad said that nobody asked her to remove all the red flags in the final audit report.

Saadatul Nafisah, 65, who retired from the civil service on May 16, 2016, however, said she only removed four issues in the audit report which were considered as a serious matter and there was justification for doing so.

The four issues included two conflicting versions of the company’s 2014 financial report.

She said the other red flags were retained in the audit report.

The seventh prosecution witness said this when she was referring to her answer to a question raised by members of the PAC then on the 1MDB report during cross-examination by Najib's lead counsel, Tan Sri Muhammad Shafee Abdullah.

She was testifying in the trial of former prime minister Datuk Seri Najib Tun Razak and former 1MDB chief executive officer Arul Kanda Kandasamy who were charged with tampering with the 1MDB final audit report.

Muhammad Shafee: Nobody asked you to remove all the red flags on 1MDB? I suggest that it still had red flags in the final version as nobody asked you to remove all?

Saadatul Nafisah: Yes

Muhammad Shafee: You only removed when there is justification (in relation to the four issues).

Saadatul Nafisah: Yes.

Muhammad Shafee: There were still plenty of red flags in the final report?

Saadatul Nafisah: Yes.

Muhammad Shafee: The PAC's members including Steven Chong, Wong Chen and William Leong questioned you on the amendments. They asked you why you accommodated the request for amendments but you said that the changes made were justified, especially on the two financial statements.

Saadatul Nafisah: Yes.

However, the witness said the amendments had not compromised the report’s integrity.

The witness was asked by Muhammad Shafee if the act of simply removing red flags would breach one’s statutory duty, to which Saadatul Nafisah replied “yes”.

Saadatul Nafisah also agreed with Muhammad Shafee that nobody put her under pressure to give the evidence to this court as well as her testimony to PAC.

Meanwhile, Saadatul Nafisah said during the meeting on Feb 24, 2016 with former Chief Secretary to the Government, Tan Sri Dr Ali Hamsa, it was agreed that the treasury's representative should lodge a police report on the two financial statements.

"That's why the former Auditor-General Tan Sri Ambrin Buang agreed to remove the parts on the two financial statements," she added.

Najib, 67, was charged with using his position to order amendments to the 1MDB final audit report which was already ‘finalised’ by the Auditor-General before the report was ‘finalised again’ and presented before the Public Accounts Committee (PAC) to avoid any action being taken against him.

Arul Kanda, 44, was charged with abetting Najib in making amendments to the report to protect the Pekan MP from being subjected to disciplinary, civil or criminal action in connection with 1MDB.

They were charged under the Malaysian Anti-Corruption Commission (MACC) Act 2009, which provides for a jail term of up to 20 years and a fine of not less than five times the amount of gratification or RM10,000, whichever is higher, upon conviction.

The trial before judge Mohamed Zaini Mazlan continues on Oct 12.