KUALA LUMPUR (Jan 13): Former National Audit Department (NAD) audit director Saadatul Nafisah Bashir Ahmad told the court that both herself and former auditor-general Tan Sri Ambrin Buang were frustrated with the amendments proposed for 1Malaysia Development Bhd (1MDB)'s final audit report.

Saadatul Nafisah, the seventh prosecution witness in the 1MDB audit report tampering trial of Datuk Seri Najib Razak and former 1MDB chief executive officer Arul Kanda Kandasamy, told the court she noticed that Ambrin seemed frustrated following the conclusion of the meeting on Feb 24, 2016, at then chief secretary to the government of Malaysia Tan Sri Ali Hamsa's office.

During examination-in-chief, senior deputy public prosecutor Datuk Seri Gopal Sri Ram asked the witness about Ambrin's demeanour after the meeting.

"I was busy with documents and discussions on the matter after the meeting, so I did not realise how he acted until we got back to our office.

"He was frustrated. As the auditor-general, I think he was not happy," said Saadatul Nafisah.

"What about you? How did you feel?" asked Gopal.

"I was very frustrated. We gave the opportunity to 1MDB to discuss the issues. I told them in the meeting that this was not a big issue and that most of the issues raised by NAD were stating the facts.

"There are more improper [items] compared to the issues we raised," she said.

Saadatul Nafisah also said she did not notice the recording device that was put into her pencil case before the meeting by audit director Nor Salwani Muhammad.

Several portions of the audit report were amended and removed before the final version was tabled, including a few mentions of fugitive businessman Low Taek Jho's involvement in 1MDB, according to the witness.

The final report also excluded a paragraph on the Islamic medium term notes (IMTN), which stated that the suspension of the IMTN was not raised in Cabinet on May 27, 2009, held after Najib's meeting with the then Yang di-Pertuan Agong earlier that day.

Saadatul Nafisah also affirmed that a paragraph relating to an agreement between Country Group Securities Public Co Ltd (CGS) and Acme Time Ltd was dropped from the report as well.

She said NAD received information and supporting documents from Bank Negara Malaysia (BNM) which showed that Low controlled Acme Time, and that he was also involved in the raising of the IMTN for the joint venture between PetroSaudi International Ltd and 1MDB.

BNM also found the secondary subscription agreement signed between AmBank and CGS, as the former sold its stake in the IMTN to the latter.

CGS subsequently entered into a put option agreement with Acme as joint transaction partner.

However, during the Feb 24 meeting, Ali said the issues relating to AmBank, CGS and Acme were outside the scope of audit or 1MDB, as they were related to the secondary market and were no longer related to the troubled fund, which led to the exclusion of the paragraph.

During a meeting on March 1, 2016, Arul raised several issues in the report which should be removed.

"Among the changes were statements based on the opinion of the audit team that were considered subjective and without strong supporting evidence," said the witness.

Najib is charged with abusing his power as a public officer, where as prime minister and finance minister, he ordered changes to the 1MDB audit report before it was finalised and tabled to the Public Accounts Committee so as to avoid any civil action or criminal prosecution against him.

He is charged under Section 23(1) of the Malaysian Anti-Corruption Commission (MACC) Act 2009, which is punishable under Section 24(1) of the same Act.

If convicted, he can be fined a minimum RM10,000 or five times the gratification and jailed up to 20 years.

Meanwhile, Arul Kanda is charged with abetting Najib under Section 28(1) of the MACC Act 2009 and faces the same punishment under Section 24(1).

For more stories on the 1MDB audit report tampering trial, click here.