KUALA LUMPUR, Nov 21 — 1Malaysia Development Berhad’s (1MDB) failure to provide documents to the National Audit Department (NAD) caused the audit to last almost a year instead of the estimated five months, the High Court heard today.
Former auditor-general (A-G) Tan Sri Ambrin Buang today testified of the limitations his department had faced when carrying out its 2015 audit on 1MDB.
Ambrin, 70, noted that some original and important documents were either submitted late or not submitted at all to his department, which needed these to verify transactions and as evidence in the audit.
“This limitation gives a significant impact on the audit that was carried out, from the aspect of verifying the actual financial position and operation of the company and related transactions.
“Among important documents that were not submitted was 1MDB Group’s Management Account for the year ending March 31, 2015 and bank statements from financial institutions abroad,” Ambrin said.
Ambrin also said the NAD could not access the computers, laptops and servers in 1MDB to obtain data and information for the purposes of cross-referencing and analysis during the audit process.
“In this situation, I felt that the 1MDB audit was very difficult and had taken almost a year when it should have been able to be completed in five months,” Ambrin added.
Ambrin pointed out that he had on April 1, 2015 already written a letter to 1MDB’s then CEO Arul Kanda Kandasamy to order 1MDB provide its cooperation to the audit team, including by allowing the auditors to inspect documents and records kept in 1MDB’s system.
The April 2015 letter had also asked 1MDB to allow the NAD auditors to access and make copies of 1MDB’s data without restriction.
Ambrin was the A-G when his department was asked by Parliament’s Public Accounts Committee (PAC) on February 27, 2015 and the Cabinet on March 4, 2015 to carry out an audit on the Finance Ministry-owned 1MDB.
Ambrin today said the audit on 1MDB was carried out to verify the 1MDB Group’s audited financial statements, as well as to evaluate if the company’s activities and financial performance matched the original objective of the company’s formation.
Ambrin said the original objective of 1MDB was to invest in projects that can help drive strategic initiatives for sustainable long-term development and to encourage the inflow of foreign direct investment into the country, and to also use the existing sovereign wealth fund network in Middle East and China to bring in foreign direct investments for national projects.
He said the audit had started on March 9, 2015, which included the appointment of audit team members, and had continued on until March 4, 2016 which was when he had presented the 1MDB audit report to the PAC.
The scope of the audit on 1MDB covered the company’s audited financial statements for the year ending March 31, 2010 to March 31, 2014.
Ambrin noted that 1MDB had yet to prepare the March 31, 2015 financial statement for audit, but noted that NAD had carried out the audit based on documents obtained from the company and discussions with its management.
The 1MDB audit report contained eight chapters, which covered the introduction, information on 1MDB’s fund-raising activities, 1MDB’s investment in SRC International Sdn Bhd, 1MDB’s investments in the real estate and energy sector, 1MDB’s financial position, corporate governance and internal controls, and the summary.
Ambrin is the sixth prosecution witness in the joint trial of former prime minister Datuk Seri Najib Razak and former 1MDB CEO Arul Kanda Kandasamy over the latter two’s role in the alleged tampering of the Auditor-General’s 1MDB audit report in 2016.
In this trial, Najib is accused of abusing his position as the prime minister and the finance minister to order changes to the A-G’s audit report on 1MDB before it was finalised and presented to the PAC with the intention of avoiding any civil or criminal action against him, while Arul was charged with abetting Najib in the alleged report tampering.
The trial before High Court judge Mohamed Zaini Mazlan will resume next Wednesday morning, with Ambrin to resume his testimony.
Related Articles Perak MB lauds audit department chief for retaining classified 1MDB report The pencil case story: How meeting to alter 1MDB audit report was recorded without anyone knowing Ambrin: Final 1MDB audit report classified under OSA to prevent leaks