KUALA LUMPUR (Nov 15): Former 1Malaysia Development Bhd (1MDB) chief executive officer (CEO) Mohd Hazem Abdul Rahman told the High Court here on Monday that former prime minister Datuk Seri Najib Razak had pressured the Malaysian government-owned company to remove KPMG as 1MDB's auditor after KPMG refused to conclude the audit of 1MDB's 2013 financial statements.
Deloitte subsequently replaced KPMG as 1MDB's auditor, Mohd Hazem said.
"KPMG did not want to close it (the audit). We were pressured by Najib to solve this and the only way to do this was to change the auditor.
"Pressure came from Najib and I was called to his office [as he wanted] to ask about the status of the audit," Mohd Hazem said during the witness re-examination by lead prosecutor Datuk Seri Gopal Sri Ram before High Court Judge Datuk Collin Lawrence Sequerah.
Mohd Hazem also said he was not in any position to disobey Najib's instructions.
The former 1MDB CEO was testifying in the 1MDB-Tanore trial in which Najib is facing four counts of abuse of power for allegedly using his positions as prime minister, finance minister and chairman of 1MDB's board of advisers to receive gratification worth RM2.28 billion, and 21 counts of laundering. He faces up to 20 years' imprisonment, if convicted.
Sri Ram then asked Mohd Hazem whether the latter personally benefitted from 1MDB money transactions that ended up in Najib's bank account.
Mohd Hazem said he did not benefit from the 1MDB money transactions.
Sri Ram: You were asked about payment irregularities in several transactions from 1MDB. Did one sen go into your account and did you financially benefit from any of those transactions?
Mohd Hazem: No.
Sri Ram then went through with Mohd Hazem several transactions involving two loans 1MDB took from Deutsche Bank AG.
The two loans comprised a US$250 million (about RM1.04 billion) loan to buy back Aabar Investments options while the other was a US$975 million loan to refinance the first loan.
From the US$975 million loan drawdown, RM45 million ended up in Najib's AmPrivate Banking account bearing numbers ending in "880".
Sri Ram asked Mohd Hazem about this AmPrivate Banking account.
Sri Ram: Does the account (ending in 880) belong to you?
Mohd Hazem: No.
Sri Ram: You told your lordship that this isn't your account?
Mohd Hazem: Yes.
Upon completion of the re-examination by Sri Ram, Mohd Hazem was released from the witness stand.
The trial before Sequerah resumes on Tuesday morning.