1MDB scandal: Court hears how US$700 million was paid for US$1 company

Datuk Shahrol Azral Ibrahim Halmi revealed how fugitive businessman Low Taek Jho @ Jho Low had constantly impressed on him the importance of "keeping the Arabs happy" whenever he was asked to rush things at 1MDB. - NSTP/MUHD ZAABA ZAKERIA

By Sharanjit Singh
October 21, 2019 @ 7:27pm

NEW STRAITS TIMES

KUALA LUMPUR: The former chief executive of 1Malaysia Development Bhd (1MDB) today gave further insights on how the sovereign wealth fund was run, including his mindset of doing things in Team Najib while managing affairs.

The 49-year old also admitted that because of this he never bothered to check some very important details or do something which could have prevented the sovereign wealth fund from drowning itself in debt.

This included the fact that 1MDB would be taking on a US$700 million debt immediately upon signing a joint venture agreement (JVA) with PetroSaudi Holdings (PSI) (Cayman) Ltd in 2009.

Shahrol acknowledged that he never bothered to inform the 1MDB board of directors of the debt before the joint venture agreement was inked.

All this was revealed when he was cross-examined by lawyer Tan Sri Muhammad Shafee Abdullah, who is the lead counsel in Datuk Seri Najib Razak's defence team.

Shahrol, who is the ninth prosecution witness, started off by answering questions on how 1MDB was established from its original existence as the Terengganu Investment Authority (TIA).

He said almost immediately after that 1MDB signed the JVA, even though he knew that PSI had entered into a loan agreement with its Cayman-based holding company to the tune of US$700 million.

Shahrol said he had flown to London with the then 1MDB executive director (business development) Casey Tang - a Jho Low appointee in1MDB - to visit the law firm which had handled the loan agreement.

Shafee: Did you see the agreement? To say that this is a loan agreement is a misnomer. It is actually an agreement for PSI to buy a US$1 company in the Caymans for US$700 million

Shahrol: I cannot remember whether I saw the agreement. However I may have been shown the agreement during one of the Public Account Committee (PAC) hearings in 2010 and 2016

Shafee: This is not something one can easily forget. It involves putting 1MDB US$700 million in debt immediately after it signs the JVA

Shahrol: Correct...but I was briefed by Jho Low that this was because of the value of assets which were injected by PSI into the JVA.

Shafee: Obviously the 1MDB board never knew of this agreement before entering into the JVA. Otherwise they would never have agreed to it

Shahrol: I agree

Shahrol then went on to explain that he left it to Casey Tang to handle the issue due to the latter's superior experience.

He said that he never asked for further details as "I was led to believe this is a government to government transaction involving trustworthy partners.

"So my framing at that point was more towards executing the deal to ensure we meet the deadlines.

"For the lack of a better phrase, it was to keep our partners happy, This whole thing was based on friendship and political considerations," he said.

Asked if he had ever checked with Najib on the veracity of Jho Low's claims that Najib wanted it done, Shahrol acknowledged that he never did so.

He said this was because at that time he recognised that working in Team Najib` involved working in silos where he need not worry about the details as it was managed by Jho Low.

However, Shahrol said he always felt discouraged to find out more about what was going on throughout his tenure as 1MDB CEO from 2009 to 2013.

Shafee: Did Najib ever tell you not to ask questions?

Shahrol: I had the opportunity to stand next to him during a corporate social responsibility (CSR) programme once. I asked him if there was anything that could be done to get our money back. However, he just answered that I should talk to Jho Low. From then on I felt discouraged to find out anything beyond my silo.

Shafee: But no one stopped you from finding out

Shahrol: Nobody stopped me

Shafee: So you chose not to.

Shahrol: I was discouraged from finding out further.

Najib, 66, is facing 25 counts of misappropriating 1MDB funds, money laundering and abuse of power.

The trial before High Court judge Collin Lawrence Sequerah continues on Thursday.

180 reads

Former 1MDB CEO reveals how money ended up in fake Aabar account, and more

Former 1Malaysia Development Bhd (1MDB) chief executive officer, Datuk Shahrol Azral Ibrahim Halmi today revealed how the Goldman Sachs Group hit pay dirt following its involvement in the issuance of bonds for the sovereign wealth fund. (NSTP/MUHD ZAABA ZAKERIA)

By Sharanjit Singh
September 30, 2019 @ 8:09pm

NEW STRAITS TIMES

KUALA LUMPUR: Former 1Malaysia Development Bhd (1MDB) chief executive officer today revealed how the Goldman Sachs Group hit pay dirt following its involvement in the issuance of bonds for the sovereign wealth fund.

Datuk Shahrol Azral Ibrahim Halmi said the Wall Street bankers walked away with hundreds of millions in brokerage fees following the issuance of US$1.75 billion (RM5.2 billion) in bonds in 2012.

"They (Goldman Sachs) got several hundred million in fees...it was all in US dollars," he said.

The bonds were issued in connection with 1MDB's take over of Tanjong Energy Holdings Sdn Bhd, which also saw the fund taking another RM6.17 billion loan from two local banks.

The 49-year old, who is the ninth prosecution witness to testify in the trial involving former prime minister Datuk Seri Najib Razak, said the bond deal was dubbed Project Magnolia.

Shahrol said 1MDB should have made money from its acquisition of Tanjong Energy, which was supposed to be listed, but it never happened.

"I can't remember any flow of cash upwards...the profits should have come from the public listing of Tanjong Energy but it never happened," he said when asked by lead prosecutor Datuk Seri Gopal Sri Ram if the acquisition of Tanjong Energy showed any returns and if the publiic listing of the company ever happened.

Shahrol was also asked on the US$577 million which had been paid by 1MDB as security deposit for the bonds.

The money was paid to Aabar Investments PJS Limited (Aabar BVI), which has since been revealed as the fake Aabar and not the actual subsidiary of International Petroleum Investment Company (IPIC).

Sri Ram: Do you know what happened to the money?

Shahrol: I don't know

Shahrol said at that time he thought everything was above board but only knew that 1MDB had been duped after finding out that the real Aabar is named Aabar Investment PJS, without the Limited.

Earlier, Shahrol also revealed how fugitive businessman Low Taek Jho @ Jho Low had pushed everyone to quickly seal the deal over the acquisition of Tanjong Energy Holdings.

He said the entire timetable and deadlines for the deal were set by Low, who pressured 1MDB daily to wrap things up as quickly as possible, almost daily.

During the morning proceedings, Shahrol was shown pictures of Najib, his wife Datin Seri Rosmah Mansor and their children Norashman and Nooryana Najwa with several individuals linked with the 1MDB scandal, namely Low, former CEO of the fake Aabar, Mohammed Badawy al-Husseiny, and PetroSaudi International Ltd (PSI) executive Tarek Obaid.

Shahrol identified all the individuals in the pictures and circled each one of them with a red ink pen after being asked to do so by Sri Ram.

It was reported that Al Husseiny has since been sentenced to 10 years' jail in Abu Dhabi after being convicted of financial crimes.

Al Husseiny, along with Khadem al Qubaisi - another individual linked with the 1MDB scandal who was handed a 15-year jail term, were also ordered to pay about US$336 million in fines, the Wall Street Journal (WSJ) reported in June.

Najib, 66, is facing four charges of using his position to obtain gratification totaling RM2.3 billion in 1MDB funds and 21 counts of money laundering related to the amount.

The Pekan member of parliament is alleged to have committed the offences at the AmIslamic Bank, Jalan Raja Chulan branch between Feb 24, 2011, and Dec 19, 2014, and the money laundering charges between March 22, 2013 and Aug 30, 2013, at the same place.

Hearing before High Court judge Collin Lawrence Sequerah continues.