PUTRAJAYA (Jan 20): Former prime minister Datuk Seri Najib Razak said that he did not intimidate KPMG’s ex-managing partner Datuk Johan Idris to close the pending audit of 1Malaysia Development Bhd (1MDB) in 2013.

Testifying in the ongoing 1MDB-Tanore trial on Monday, Najib also said he did not instruct one of the Big Four audit firms to close the account and only wanted to see a resolution to the matter.

"I cannot instruct auditors that is wrong… even if I did instruct, they cannot follow my instruction,” he said. “They are independent auditors [and] KPMG is a reputable audit firm.”

The now-imprisoned 71 year-old added: "I wanted it resolved but not at the expense of the rules and ethics of being an auditor.”

The testimony is in relation to the troubled strategic development firm's audit statement dated March 31, 2013.

KPMG was hesitant to close the audit due to 1MDB's US$2.3 billion (RM10.3 billion) investments made through Brazen Sky Ltd in an unknown fund called Bridge Global SPC. The auditors had difficulty obtaining "evidence on the existence, accuracy, completeness and valuation of the investment.”

Johan, who was the prosecution's 14th witness, had testified that the firm was intimidated by Najib into signing off the long-delayed 2013 financial statements, purportedly during a meeting at Najib's private residence in Langgak Duta.

Deputy public prosecutor Deepa Nair Thevaharan pointed out Johan's testimony that he felt cowed to sign off the account.

Deepa: He [said] that he was intimidated.

Najib: Intimidated? No, no, no. I [just] said I would like [for the matter to be resolved]. The [assertion of intimidation] is unfounded. I would never intimidate him.

Following the meeting between Najib and Johan, coupled with KPMG's hesitancy to sign off on the financial statements, the audit firm received a letter from 1MDB informing that its services as 1MDB's external auditor were to be terminated immediately.

No reason was given although KPMG was informed that Deloitte would be replacing it. KPMG was the second auditor sacked by 1MDB after refusing to sign off the investment fund's accounts for the financial year ended March 31, 2013.

KPMG took over the audit job from Ernst & Young that was then removed in 2010.

On the stand on Monday, Najib also testified that KPMG's eventual termination was in line with 1MDB's management's decision.

"That is what management wanted, [it's] not my decision," he said.

Former 1MDB chief executive officer Mohd Hazem Abdul Rahman also testified that Najib had pressured them to dismiss KPMG as auditors.

In this trial, Najib faces four abuse of power and 21 money-laundering charges.

The trial before presiding judge Datuk Collin Lawrence Sequerah continues.

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