KUALA LUMPUR: The High Court here today was told that Datuk Seri Najib Tun Razak (pix) had “instructed” KPMG Malaysia to sign off its audit report of 1Malaysia Development Berhad (1MDB) for the year 2013, during the firm’s meeting with 1MDB, held at the former prime minister’s residence in Langgak Duta on Dec 15, 2013.
KPMG Malaysia managing partner, Datuk Johari Idris, 56, said the meeting was held to inform Najib of the issues faced by KPMG, which meant that the company’s audit report could not be released, and KPMG also wanted to hear from Najib, who was the Finance Minister at the time, whether he himself knew about the USD 2.3 billion investment in Brazen Sky in the Cayman Islands.
“Before the meeting ended, Najib stated that he wanted to see the 1MDB account signed off by KPMG on or before Dec 31, 2013, but I did not give any response to him,” said the 14th prosecution witness.
When questioned by deputy public prosecutor, T. Deepa Nair, about the witness’ reaction to (Najib’s desire to see 1MDB’s account signed by KPMG), the witness replied “it was like an ‘arahan’ (instruction) to me.”
Johari said that, in the meeting, Najib also stated that he (Najib) was aware of 1MDB’s investment in Brazen Sky, but he said that 1MDB could not disclose the details of the investment as it was confidential.
“Najib also questioned why KPMG was still suspicious about the underlying assets. He also asked me if I could accept the explanation, and whether the (explanation) was sufficient on behalf of KPMG to issue an audit report (which was unconditional).
“However, I stated that I needed evidence to complete the audit process in accordance with the provisions of the International Standard of Auditing (ISA) and Financial Reporting Standard (FRS), where the FRS rules are also enshrined in the Companies Act 1965.
“I said that if KPMG was unable to complete the 1MDB investment audit process, then we would add a disclaimer of opinion report on 1MDB’s account,” he said when reading his witness statement during Najib’s trial on the misappropriation of RM2.3 billion from 1MDB funds.
Johari said that Najib also expressed concern over the delay in preparing the accounts, and he wanted to know the status of 1MDB’s audit besides asking why KPMG could not accept the confirmation made by BSI Bank, as it was the custodian bank of the investment in Brazen Sky, a subsidiary of 1MDB.
“I have stated that BSI Bank did not provide complete details to KPMG to complete the audit of underlying assets. Without the information, KPMG could not conduct audit procedures to confirm that the assessment is correct,” he said.
Johari also confirmed that Najib stated that he had been informed that Bridge Partners (a private investment firm) was unable to provide the required information, due to legal provisions and trade secrets of the fund. — Bernama
More to come