Arul Kanda sought probe over existence of two 1MDB audit reports: Auditor

KUALA LUMPUR (Nov 22) : A government auditor confirmed yesterday that former 1Malaysia Development Bhd chief executive officer Arul Kanda Kandasamy had wanted a police report to be lodged over the existence of two conflicting 1MDB audit reports for 2014.

Nor Salwani Muhammad, an audit director at the National Audit Department (NAD), testified in the High Court that the matter was raised by Arul Kanda during the exit conference held on Dec 16, 2015.

“There is a recording of the exit conference and the minutes of the meeting for our internal consumption,” she said in replying to questions from Arul Kanda's lawyer Datuk N Sivananthan.

She explained that exit conferences are held between NAD and the auditing company to get an explanation over questions or discrepancy that are raised and that the meetings are held at the department. The explanations would be included in the final audit report.

The NAD was asked to do an audit on 1MDB by the Public Accounts Committee, as this was agreed to by the Cabinet in February 2015.

Nor Salwani said the Dec 16, 2015 meeting was attended by Arul Kanda and 1MDB's former director Terence Geh.

The witness, who was the fifth called by the prosecution, said she could not remember if any representatives from the Finance Ministry were present at the meeting.

Sivananthan: Did my client said in the exit conference that a report should be lodged over the two 1MDB audit reports (for 2014)?

Nor Salwani : Yes, he has asked for a report [to] be lodged.

Sivananthan: This was during the Dec 16, 2015 exit meeting?

Nor Salwani : Yes correct, on Dec 16.

Sivananthan : Were recordings made of the meeting?

Nor Salwani : Yes, but it could have been deleted after the minutes had been made.

Sivananthan : So this should be reflected in the Dec 16, 2015 minutes, unlike the one held on Feb 24, where no minutes were recorded?

Nor Salwani : Yes, but the minutes are for our internal consumption or reference.

Sivananthan : Did you supply the minutes to the investigating officer?

Nor Salwani : Yes.

Sivananthan : Were you shown the exit conference minutes by the investigating officer?

Nor Salwani : No.

Sivananthan said his defence team were not provided with the Dec 16, 2015 minutes and asked that they be given the minutes.

Nor Salwani said she was uncertain whether a recording of the exit conference was given to the investigating officer, and so she said she would look into it.

The witness agreed Arul Kanda gave the NAD, 250 pages of documents in relation to 1MDB, but in the final audit report, there were some 350 pages of documents.

Nor Salwani said the additional documents were in relation to 1MDB's former subsidiary, SRC International Sdn Bhd, where a separate exit conference was held.

SRC was initially a subsidiary of 1MDB. However, following a second RM2 billion loan in 2012, the company was placed directly under Ministry of Finance Incorporated (MoF).

Earlier, Nor Salwani testified she was the one who left her recorder in the meeting room during the NAD's meeting with then chief secretary to the government Tan Sri Ali Hamsa, and a few others on Feb 24, 2016.

This, she said, was to facilitate her to prepare minutes of the meeting, as it had become the NAD’s practice to prepare one after every meeting. She said her audit team was shocked after listening to the recording of the meeting.

The witness was testifying in former premier Datuk Seri Najib Abdul Razak’s and Arul Kanda's audit tampering trial. Najib is charged with abusing his power in directingthe 1MDB audit report be amended by omitting certain facts, so that no action can be taken against him.

The hearing continues on Wednesday.

For more stories on the 1MDB audit report tampering trial, click here.

Click here for more property stories.