Najib exempted 1MDB from government audit, says MACC officer

MACC officer claims Najib Razak informed the national audit department that Ernst & Young had been appointed 1MDB’s auditors.

(FMT) – An investigating officer told Najib Razak’s 1MDB trial today that the former prime minister had exempted the sovereign wealth fund from being audited by the auditor-general.

Malaysian Anti-Corruption Commission (MACC) officer Nur Aida Arifin said Najib had in a letter dated Dec 22, 2009, informed the national audit department (JAN) that 1MDB had appointed Ernst & Young to audit its financial statements.

This was after the Treasury had suggested that the auditor-general carry out due diligence and auditing duties on 1MDB after the fund, then known as the Terengganu Investment Authority (TIA), was taken over by the federal government in July that year.

Aida said that following the takeover, 1MDB sought to enter into a joint venture with Petro Saudi International (PSI).

Under the terms of the proposed agreement, 1MDB was required to fork out US$1 billion for the venture. However, 1MDB directors could not agree to certain terms of the joint venture proposed by PSI, she said.

Aida claimed a board meeting held on Sept 26, 2009, to discuss the terms of the agreement was also attended by fugitive businessman Low Taek Jho (better known as Jho Low).

Aida said Low handed his mobile phone to then 1MDB chairman Bakke Salleh while the meeting was in progress.

She said that based on her investigations, Najib told Bakke during the call “not to question how money was raised”.

“He (Najib) also told Bakke that the board should quickly consider the PSI proposal and ‘firm up’ a decision on it because it was a G2G (government-to-government) initiative,” she added.

Aida said that following the phone call, Bakke informed the meeting that Najib had instructed the board to approve the proposed joint venture with PSI.

She said Bakke resigned in October 2009, citing his unhappiness that 1MDB management staff had disobeyed instructions by transferring US$700 million to an unknown firm.

Only US$300 million of the US$1 billion was deposited into the 1MDB-PSI joint venture account, with the remainder transferred to Good Star Ltd, a company controlled by Low.

Najib faces 25 counts of money laundering and abuse of power charges over alleged 1MDB funds amounting to RM2.28 billion deposited in his AmBank accounts between February 2011 and December 2014.

The hearing continues before Justice Collin Lawrence Sequerah on Jan 5.