Najib seemingly ordered me to sign off 1MDB 2013 account - KPMG partner

1MDB TRIAL | Former prime minister Najib Abdul Razak had seemingly ordered KPMG’s managing partner Johan Idris to sign off on 1MDB’s financial statement for 2013, the Kuala Lumpur High Court heard today.

The 14th prosecution witness testified on his impression of Najib’s request during a meeting at the former finance minister’s residence at Jalan Langgak Duta, Kuala Lumpur, on Dec 15, 2013.

Previously during Najib’s RM2.28 billion 1MDB corruption trial, the court heard testimony on KPMG being dissatisfied with the lack of information and documentation given over the sovereign wealth fund’s US$2.3 billion (RM9.8 billion) overseas investment in the Cayman Islands.

Due to 1MDB management's alleged refusal or inability to provide sufficient documentation and information about the overseas investment, the international auditing firm then pressed for a meeting with Najib at his house. Johan (above) was present during the meeting.

Following KPMG’s refusal to sign off on 1MDB’s 2013 accounts, it was later dropped as an auditor of the fund and Deloitte was brought onboard instead.

Najib Abdul Razak

1MDB is fully owned by the Minister of Finance Incorporated (MoF Inc) and Najib used to be the chairperson of the fund's board of advisers.

Trade secret aspects

During examination-in-chief by deputy public prosecutor T Deepa Nair today, Johan testified that during the meeting, Najib explained that Bridge Partners - who managed 1MDB’s overseas investments - could not provide the information sought by KPMG.

Johan added that the then premier said it was because of legal provisions as well as trade secret aspects of the Cayman Islands investment.

Johan said he explained to Najib that 1MDB needed to comply with the International Standard on Auditing as well as Malaysia’s Companies Act 1965, otherwise the sovereign wealth fund would break the law.

Johan: Before the meeting ended, Najib asked for the 1MDB accounts to be signed by KPMG before or on Dec 31, 2013, however, I could not give him a response.

I also did not understand why 1MDB refused to provide information about the underlying assets (overseas investments) that were said to be confidential.

Additionally, no further supporting documents were provided about the confidentiality. The meeting lasted around 45 minutes.

Deepa: What was his (Najib’s) reaction?

Johan: It seemed to be an order to me.

The witness also confirmed that KPMG later received a letter from 1MDB dated Dec 31, 2013, which informed it of its termination of service as an auditor.

Shafee to cross-examine Johan

Proceedings before trial judge Collin Lawrence Sequerah will resume this afternoon, with lead defence counsel Muhammad Shafee Abdullah expected to cross-examine Johan.

Najib is on trial for four counts of abuse of power and 21 counts of money laundering involving RM2.28 billion of 1MDB’s funds.

The prosecution contended that the wrongdoing at 1MDB was done by businessperson Low Taek Jho (Jho Low) on the authority of Najib.

The defence team claimed that the accused had no knowledge of wrongdoing and that the whole embezzlement scheme was solely masterminded by Low and several members of the fund’s management team. - Mkini