[UPDATED] High court acquits Najib, Arul Kanda of 1MDB audit tampering charges

KUALA LUMPUR – Former prime minister Datuk Seri Najib Razak has been acquitted over charges of tampering with 1Malaysia Development Bhd’s (1MDB) 2016 audit report.

Justice Mohamed Zaini Mazlan, who has been elevated to the appellate court recently, ruled that the prosecution failed to present evidence to show that Najib ordered the amendments to the audit report.

Meanwhile, 1MDB former chief executive officer Arul Kanda Kandasamy, who was earlier charged with Najib, was discharged and freed from his charge.

“The amendments to the audit report were based on the auditor-general’s (AG) judgement and agreement and based on documents from the 1st accused (Arul Kanda). This would not have been necessary if 1MDB’s management had been more cooperative before the publication of the earlier audit report.

“There was no evidence to show that the AG was forced to attend the meetings or make changes to the audit report.

“As for the gratification that was alleged to have been sought, I agree that there was no causal link between the amendments made and the gratification alleged. There is no evidence to suggest or prove that the second accused had explicitly directed the amendments made to exonerate himself from any civil or criminal liability. 

“He was merely concerned that the audit report could be spun politically. The prosecution has established how the items removed or amended could give rise to civil or criminal liability to the second accused,” Zaini said in his judgement.

“In my opinion, the items taken out from the earlier audit report will not give rise to any civil or criminal liability to the second accused. The amendments, as stated by the AG, were justified. The amendments were also known to the Public Accounts Committee (PAC) and openly discussed.

“Therefore, I find that the prosecution could not prove gratification.”

In Arul Kanda’s case, Zaini said the former 1MDB chief executive officer was unfairly vilified for the firm’s problems that were perhaps done before the latter’s tenure.

“The first accused did not attempt to cover up the shenanigans of 1MDB. He was roped in to rescue 1MDB and had left a promising career abroad.

“It is general knowledge that he was publicly vilified for 1MDB, perhaps unfairly, as many of the problems were before his time. There was no evidence in this trial to say that he was complicit in 1MDB problems.

“I find that the first accused has made a full and true discovery of all things, of which he was wrongly examined and order a certificate of indemnity be issued to him stating that he has made a true and full discovery.

“This certificate shall be abound to all proceedings against him in respect of the matters arising from this charge. The first accused is therefore discharged and acquitted from the charge against him,’’ Zaini added.

The prosecution closed its case on September 7 after calling 16 witnesses, including former chief secretary to the government Tan Sri Ali Hamsa (now deceased); former auditor-generals Tan Sri Ambrin Buang and Tan Sri Madinah Mohamad; former 1MDB chairman Tan Sri Mohd Bakke Salleh and former National Audit Department audit director Saadatul Nafisah Bashir Ahmad.

The February 24, 2016 meeting among stakeholders had taken place at Ali Hamsa’s office, where decisions were made to remove or change certain parts of the audit report, including omitting the existence of 1MBD’s two conflicting financial statements for 2014.

Prior to the February 24, 2016 meeting, Najib had called a meeting on February 22, 2016, with Ambrin, Ali and Tan Sri Shukry Mohd Salleh (Najib’s former principal private secretary) to discuss the findings of the 1MDB final report.

In this case, Najib was charged with abusing his position as prime minister and finance minister to order amendments in February 2016 to the AG’s audit report on 1MDB before its finalisation and presentation to the PAC to avoid any civil or criminal action against him, while Arul Kanda was charged with abetting Najib in the report’s tampering.

Purported changes to the audit report include the removal of four items in the report, including 1MDB's two conflicting 2014 financial statements.

Last year, Arul Kanda took the stand as a witness in the case after the judge allowed the prosecution’s application under Section 63 of the Malaysian-Anti Corruption Commission (MACC).

Najib, 70, who is currently serving a 12-year jail sentence for misappropriating SRC International Sdn Bhd’s funds, is charged with using his position to order amendments to the 1MDB final audit report before it was presented to the Public Accounts Committee to avoid any action being taken against him.

Arul Kanda, 46, is charged with abetting Najib in making the amendments to the report to protect Najib from being subjected to action.

The offence was allegedly committed at the Prime Minister’s Department Complex, Federal Government Administrative Centre, Putrajaya, between February 22 and 26, 2016.

Both were charged under Section 23 (1) of the MACC Act, which provides for a jail term of up to 20 years and a fine of no less than five times the amount of gratification or RM10,000, whichever is higher, upon conviction.

Najib still has four pending court cases involving the misappropriation of RM2.3 billion of 1MDB funds. So far, the prosecution has called 44 witnesses.

He also has two other cases involving criminal breach of trust amounting to RM6.6 billion over payments to the International Petroleum Investment Company and money laundering involving SRC International funds worth RM27 million. Both cases are at the case management stage. – The Vibes, March 3, 2023