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KUALA LUMPUR: Former 1MDB CEO Mohd Hazem Abdul Rahman said at Najib Razak’s trial that the former prime minister met with company staff and directors to tell them to convince KPMG auditors to shut down the 2013 financial statement of the company.
He told the Superior Court that he received an email from fugitive businessman Low Taek Jho (Jho Low) on November 28, 2013 informing him and others to go to Najib’s home that night.
Hazem said others who joined the meeting were 1MDB president Che Lodin Wok Kamaruddin, 1MDB director Ismee Ismail, CFO Azmi Tahir and Najib’s top private secretary, Azlin Alias. He also saw Yak Yew Chee, a banker for BSI Bank Singapore, outside, but who joined them when they called him later to explain an issue.
Asked by Deputy Prosecutor Mohamad Mustafa P Kunyalam about which house he went to on November 28, 2013, Hazem said he went to Najib’s private residence in Langgak Duta.
“When I got to Datuk Seri Najib’s house, I saw Jho Low talking to him. Jho Low started the meeting by saying how we should justify 1MDB’s investment in fund manager Brazen Sky Ltd, ”he said.
Hazem added that the Penang businessman told them that US $ 2.3 billion in Brazen Sky was in the custody of BSI Bank, and as a recognized financial institution, BSI Bank had informed them that the investment could generate high returns.
“Datuk Seri Najib listened and agreed with what Jho Low explained to us. He did not object to Jho Low’s suggestions.
“Yaw Chee was summoned to the meeting to explain that the documents that BSI Bank gave KPMG were sufficient to indicate the balance in his bank account.
“Datuk Seri (Najib) then asked Yaw Chee when the funds could be redeemed, to which Yaw Chee said that the investments took between six and nine months, and 1MDB could convert the investments to cash afterwards,” he said, responding to Mustafa’s question about the meeting.
Hazem added that Low’s justification seemed reasonable, but added that Low had indirectly told them to lie to the auditors.
“I think the funds abroad may have been spent for Umno,” he said.
Meeting with the KPMG auditor
The witness said that another meeting was held on December 15, 2013 in Langgak Duta again, where KPMG auditor Johan Idris met with Najib, as KPMG wanted to hear the explanation from the prime minister about investments in Brazen Sky.
Johan is the managing partner of KPMG here.
“Azmi, Lodin and I were prepared by Jho Low, through his emails, to answer KPMG’s questions about Brazen Sky.
Johan asked Datuk Seri if he was aware of Brazen Sky’s investments, and he replied that he had been informed.
“Datuk Seri then asked Johan why KPMG doubted the Brazen Sky investments, and he told Johan that he wanted the accounts to be closed before December 31,” Hazem said.
Hazem said that Johan did not give Najib any comment on the spot.
“However, this meeting failed to persuade KPMG to close the accounts even after hearing the explanation from the prime minister.”
Hazem said 1MDB management staff subsequently proposed to company directors to replace KPMG with Deloitte as auditors.
“Datuk Seri also called me several times to tell me to make sure the 2013 financial statement is closed.
“We were left with no choice but to replace KPMG because we were under pressure from various parties, including the prime minister,” he added.
When Deloitte took over, Hazem said they were also confronted by auditors over the Brazen Sky investment in 2014.
“I felt pressured because I couldn’t justify the investment. Deloitte told us that they would not close the 2014 release if they could not receive our comments. “
Hazem added that he raised the issue of Deloitte’s refusal to Low, and that the businessman devised a plan to liquidate $ 1.3 billion of the $ 2.3 billion in Brazen Sky and repatriate the money.
“Azmi and I flew to Singapore to meet with representatives from Deloitte Asia Pacific. We beg you to close the statement on US $ 1.3 billion in liquidated funds, “he said.
The hearing continues before Supreme Court Justice Collin Lawrence Sequerah on Thursday.
Najib faces 25 charges of abuse of power and money laundering for alleged 1MDB funds amounting to RM2.28 billion deposited into his AmBank accounts between February 2011 and December 2014.
