Former auditor-general Madinah says she was 'shocked' on discovering 1MDB audit report was tampered with

Madinah: I was not shocked about the amendments. I was shocked that Ambrin was instructed to amend and Salwani was to destroy all the copies.

Madinah: I was not shocked about the amendments. I was shocked that Ambrin was instructed to amend and Salwani was to destroy all the copies.

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KUALA LUMPUR (March 30): Former auditor-general Tan Sri Dr Madinah Mohamad told the High Court that she was “shocked” to find out there were two versions of the audit report on 1Malaysia Development Bhd (1MDB) when she took over the top position in the National Audit Department (NAD) in 2017.

After taking over the role from her predecessor Tan Sri Ambrin Buang, Madinah said she was informed by audit director Datuk Nor Salwani Muhammad that there were two versions of the 1MDB audit report.

During cross-examination by lawyer Tan Sri Mohammad Shafee Abdullah in the 1MDB audit tampering trial involving former prime minister Datuk Seri Najib Razak and ex-1MDB CEO Arul Kanda Kandasamy, Madinah said she was briefed on the existence of the two versions by Nor Salwani in her very first meeting with her officers shortly after her appointment.

She also testified that she did not know that Ambrin was instructed to amend the “original report”, that Nor Salwani was instructed to destroy the “original report” and that Nor Salwani had kept one original copy under her chair.

“In March of 2017, I was shocked. I had no idea that there were two copies. I had no idea Ambrin had orders to amend the audit report and she (Nor Salwani) had orders to destroy the original report, but she kept one under her chair,” Madinah told the court.

The first “original report” was published in 2016. The content of that report was changed to omit several paragraphs, and it was reprinted a second time on March 2, 2016.

In her press statement dated Nov 24, 2018, Madinah confirmed that the 2016 final NAD audit report on 1MDB was tampered with, and that orders to alter the report first came from Najib.

The two issues that were omitted from the second version were: an audit finding on 1MDB’s audited financial statement in 2014, and the presence of fugitive businessman Low Taek Jho, better known as Jho Low, in a special meeting with 1MDB board of directors.

Madinah said in the proceedings on Wednesday (March 30) that while she was not shocked at the amendments, she was indeed shocked at the instructions to amend and instructions given to Nor Salwani to destroy the “original copies”.

“I was not shocked about the amendments. I was shocked that Ambrin was instructed to amend and Salwani was to destroy all the copies,” she said.

Madinah had previously testified that Nor Salwani had kept the original audit report for the purpose of getting instruction from the new auditor-general (Madinah) on whether the document should be destroyed.

The witness also told the court that Nor Salwani had kept the only copy of the “original report” under her chair from 2016 until she had met Madinah in her first meeting as auditor-general.

Madinah explained that Nor Salwani had told her about the tampering and the existence of the original report just minutes before the first meeting between Madinah and her officers.

Madinah said that after the briefing, she had kept the original report under lock and key as it was under the Official Secrets Act (OSA).

“After the briefing, I kept the original and amended [copy] in a safe cabinet and it was under OSA at that time. Under OSA we can’t divulge and share, it was under lock and key for that duration,” she said.

Shafee then asked her why she did not ask any of her officers about this matter as they could have shed more information about the original report and the tampered report.

Shafee: The whole team knew, they were participants in the discussions of the audit report.

Madinah: I didn’t say they didn’t know about the amendments.

Shafee: You knew about it and they knew about it, so why didn’t you discuss?

Madinah: This was under OSA. This was highly confidential and I kept it under lock and key in my room. The original copy, it was OSA, that was what I did. I would like to clarify when I was given the briefing, it is because I was the new AG and I needed to know. It was not because there was going to be follow-up action. After being briefed on follow-up version (by Nor Salwani), it was kept away, and there was no reason to deep dive into it at that time. There was nothing of that nature to have any follow-up on the 1MDB audit, that’s why it was kept in the safe.

After a few exchanges between Shafee and Madinah, things got heated when Shafee asked her why she did not do anything about the reports.

Shafee: Let’s not beat about the bush, you found out, and what did you do?

Madinah: There’s no further action required from auditor general from 1MDB. So I kept it in safe.

Madinah then said 1MDB in 2016 and 2017 was a sensitive topic and no one spoke about it in the country, to which Shafee responded: "That everything about 1MDB is OSA is nonsense, I’m surprised [you are saying] can’t talk about it, can’t whisper about it."

Madinah: That was at the time.

Shafee: In 2015, the whole world was talking about it already.

Madinah: Not in this country.

Shafee accused Madinah of doing nothing for one year and four months

Additionally, Shafee highlighted that as Madinah was appointed in February 2017, she had a year and about four months as the auditor-general under Najib's tenure but did not raise the altered report to him.

Shafee: Even if you did not want to declassify it (the report) you would have had occasions to see the prime minister... for one year and about four months (before the change in government in 2018).

Madinah: Yes.

Shafee: As a courtesy, using your own words, [did] you ask Najib [anything pertaining] to these two reports... that you were shocked by what Salwani told you?

To this, Madinah answered that she had not taken a "deep dive" into the original report as there were no further activities in relation to 1MDB, implying she had no reason to bring the matter up with Najib.

She then agreed with Shafee that she did not confront Najib on whether the latter had given any instructions in relation to the audit report.

Shafee: So you can confirm that you never confronted Najib at all, whether he was giving any instructions in relation to the audit report?

Madinah: No, I didn't.

Madinah had declassified the report in 2018 when Tun Dr Mahathir Mohamad was prime minister. After her meeting, she released a press statement saying that the document would be declassified.

Earlier, Madinah had said when she served as the auditor-general under Najib, she would meet the former premier when "necessary", and highlighted one such occasion in relation to homes for second generation Felda settlers.

She said she had met Najib before tabling the Auditor-General's Report in Parliament as it could "bring about possible consequences to" then Felda chairman Tan Sri Mohd Isa Abdul Samad.

"[I met Najib] in relation to the Auditor-General's Report... I can't remember in 2016 or 2017... it was a courtesy to brief the [then] PM so that he won't be taken off guard," she said.

Shafee highlighted that Madinah was the first AG without a formal education in accounting, auditing or business management like her predecessors Ambrin and Tan Sri Dr Hadenan A Jalil.

Madinah hit back, saying that when she served as secretary-general in the Ministry of Science, Technology and Innovation (MOSTI) and the Education Ministry, she was appointed to several boards such as the Securities Commission Malaysia (SC), Malaysia Digital Economy Corporation (MDEC) and Malaysian Communications and Multimedia Commission (MCMC) so she had exposure as a board member on matters regarding finance and auditing.

Madinah added that she holds a Bachelors in Political Science, a Master and PhD in Human Resource Development.

Madinah also revealed on Wednesday that she had contracted Covid-19 and was hospitalised for about a month last year, therefore she couldn't remember specific dates.

When further nudged by Shafee if her memory was impacted from this, she curtly replied: "My mind is very lucid. I can think very clearly... [I can] analyse very clearly... I can remember the gist, I have not lost my memory in that sense."

In the trial, Najib is charged with abuse of power as a public officer in his capacity as prime minister and finance minister in altering the 1MDB audit report which was to be tabled to the PAC in 2018. This was so that no action could be taken against him by Parliament.

Meanwhile, Arul Kanda is charged with abetting Najib.

Read also:
Former auditor-general: I wanted to get the job on my own merit
1MDB audit report now declassified, says Auditor-General

Surin Murugiah