Najib Testifies in 1MDB Trial
KUALA LUMPUR: Najib Razak, the former Prime Minister of Malaysia, testified in his 1MDB trial that 1MDB removed KPMG as its auditors in 2013 after the audit firm refused to sign off on the company’s financial statement for that year.
Najib stated that he signed the letter dispensing with KPMG’s services after being told by 1MDB that KPMG refused to accept BSI Bank’s confirmation that a 1MDB investment of US$2.3 billion was being held with Brazen Sky Ltd. The auditors said they would need to head to Hong Kong to verify the matter, he added.
Dispute with KPMG
Najib said the state investment arm had until December 31, 2013, to submit its accounts to the Companies Commission of Malaysia (SSM). He referred to the minutes of a meeting, saying, "I had not in any way directed KPMG to accept the confirmation by BSI or 1MDB’s explanation. I asked the management to assist in obtaining the necessary information for KPMG."
Earlier in the proceedings, the court heard that KPMG had questioned 1MDB’s US$2.3 billion investment in Brazen Sky Ltd as it could not verify the authenticity of the investment.
KPMG’s Refusal
KPMG auditors met Najib at his home on December 15 that year. Its managing partner, Johan Idris, told the court that Najib had "ordered" him to sign off on the 2013 financial statement. KPMG was subsequently replaced by Deloitte as 1MDB’s auditors.
Deloitte’s Appointment
Najib said 1MDB recommended that Deloitte take over at the 11th hour. "They (Deloitte) complained that they were not happy with how KPMG conducted the audit. (Former 1MDB chairman) Lodin (Wok Kamaruddin) even mentioned that KPMG was being unfair in requesting something that 1MDB could not provide," he said.
Disputing Loo’s Testimony
Najib also disputed former general counsel Jasmine Loo’s testimony earlier this year, in which she said Kee Kok Thiam, an aide to Low Taek Jho (Jho Low), had prepared drafts of "donation letters" in a hotel room in London, nine years ago. Loo told the court that the fugitive businessman had instructed Kee to prepare a letter purportedly from "Prince Saud" claiming that the money was a donation from the Arab royal family.
Najib said Loo’s narrative sounded "more like a scene from a Bollywood movie than a credible sequence of events."
Conclusion
The former Prime Minister is standing trial on 25 charges of abuse of power and money laundering over alleged 1MDB funds amounting to RM2.28 billion deposited into his AmBank accounts between February 2011 and December 2014. The hearing before Justice Collin Lawrence Sequerah continues on December 12.
FAQs
- What was the reason for KPMG’s refusal to sign off on 1MDB’s financial statement?
KPMG refused to sign off on the financial statement because it could not verify the authenticity of 1MDB’s US$2.3 billion investment in Brazen Sky Ltd. - Who replaced KPMG as 1MDB’s auditors?
Deloitte replaced KPMG as 1MDB’s auditors. - What was the purpose of the donation letters prepared by Kee Kok Thiam?
According to Loo, the donation letters were prepared as a way to channel 1MDB funds into Najib’s accounts.