This article first appeared in The Edge Financial Daily on November 26, 2018

KUALA LUMPUR: Auditor-General (A-G) Tan Sri Dr Madinah Mohamad has confirmed that the original audit report on 1Malaysia Development Bhd (1MDB) issued in 2016 by the National Audit Department had been altered, and that orders to tamper with the report first came from former prime minister Datuk Seri Najib Razak.

In a statement dated Nov 24, she said the “unaltered version of the 1MDB audit report has also been submitted to the Malaysian Anti-Corruption Commission (MACC) and the police for further investigation”.

Following that, the MACC announced it has commenced investigations into tampering allegations and is looking at the original report to compare it with the final draft that was issued.

“With respect to that, MACC will call several witnesses in the nearest period to give their statements and to help with investigations into the issue,” the anti-graft body said in a press release yesterday evening.

In her statement, Madinah said among the alterations that were done prior to the audit report being presented to the Public Accounts Committee (PAC) on March 4, 2016 was the removal of the mention of Low Taek Jho’s, or Jho Low’s, attendance at a 1MDB board meeting.

The shocking revelation was in direct contrast to what Najib previously said in Parliament to various questions posed to him during his tenure as finance minister when asked about Jho Low’s role in 1MDB.

“Mr Low Taek Jho has never worked with 1MDB nor had business dealings with 1MDB. All 1MDB decisions and businesses were made by the management and board of directors of 1MDB” was Najib’s answer to one such query in Parliament in 2015.

From Madinah’s accounting of what took place, the orders to alter the audit report began with a meeting with Najib at the Prime Minister’s Office on Feb 22, 2016, followed by several meetings at the former chief secretary to the government Tan Sri Dr Ali Hamsa’s office that were joined by former 1MDB president and chief executive officer (CEO) Arul Kanda Kandasamy.

Former auditor-general Tan Sri Ambrin Buang, who had previously rubbished claims that the report was tampered with, was also in attendance at most of the meetings, where the orders were given to make changes to it. Yet, Ambrin said this to reporters in late October this year when asked about the tampering claims: “As far as I know, there is no tampering.”

According to Madinah, the sequence of events began with former chief private secretary to Najib, Tan Sri Shukry Salleh, requesting on Feb 20, 2016 that the 1MDB Audit Team submit the final audit report on 1MDB for discussion with Najib.

In the meeting that took place two days later at the Prime Minister’s Office in the presence of Ali, Ambrin and Shukry, Najib ordered the removal “of [a] paragraph containing two versions of 1MDB financial statements for the year ending 2014, and directed investigations to be conducted by enforcement authorities”.

Because of that, presentation of the audit report to the PAC — which was originally scheduled for Feb 24 — was delayed to March 4 and 7.

Subsequently, on Feb 23, at a meeting with Ali, Ambrin and Shukry, the 1MDB Audit Team was informed that the government had categorised the report as a “crisis”.

A day later, Arul Kanda joined a meeting with Ali and Ambrin that was attended by a representative of the Attorney-General’s Chambers, a representative of the finance ministry, the former chief secretary to Ali, and the former audit director to discuss the 1MDB audit report. “As a result of this discussion, a few more paragraphs from the report were directed to be removed and altered,” Madinah said.

On Feb 25, the 1MDB Audit Team was then ordered by Ali to attend another meeting at his office with himself and Arul Kanda to continue discussions on the audit report, following which a few more discoveries that were reported were removed and altered. Later that same day, Ambrin, the former audit director, and three other officers joined the continued discussions on the audit report.

On Feb 26, Shukry ordered the former audit director to remove the paragraph stating Jho Low’s attendance at one of the meetings of 1MDB’s board of directors, on the grounds that it was sensitive information and to avoid the matter being twisted by the opposition.

On Feb 28, former chief secretary to Ali requested that the altered audited report be submitted to Ali, which was done the next day.

On March 1, Ali ordered the 1MDB Audit Team to once again attend a meeting to discuss the altered audit report. “During this session, only the former president and CEO of 1MDB (Arul Kanda) was present and he checked the report in detail with the Audit Team and requested a few more changes (removals/alterations) to the report,” Madinah said.

The final audit report was then printed on March 2, and two copies were submitted to Ali the next day. The report was then presented to the PAC on March 4 and 7.

At the time, Messrs Deloitte was 1MDB’s external auditor. It is 1MDB’s third external auditor after Ernst & Young and KPMG.

Madinah said she was told to reveal what took place regarding the tampering after she briefed the cabinet last Friday about the issue.