Najib 1mdb Trial Day 25 1mdb Believed That Petro Saudi Caymans Was Fully Owned By Psi

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The criminal trial of former prime minister Najib Abdul Razak involving the alleged abuse of power and money laundering of 1MDB funds enters its 25th day today at the High Court in Kuala Lumpur
Malaysiakini brings you live reports of the proceedings
KEY HIGHLIGHTS  1MDB relied on representation that Petro Saudi Caymans was fully owned by PSI: WitnessDocument stated joint-venture with Petrosaudi to benefit Malaysia's FDIEdward Morse valued non-existent PSI 'asset' in Turkmenistan at US$3.95b1MDB only did Internet search to confirm PSI assets ownership - ShahrolNajib said he was not out to destroy the country: ex-1MDB CEOWitness never checked if US$700m advance in JV company is reflected in its books1MDB was Najib, Najib was 1MDB, says ex-1MDB CEOJho Low was also adviser for PetrosaudiEx-1MDB CEO signed agreement with PSI out of his trust on Jho Low's associate Agreement with PSI only gives 1MDB less than 48 hours to terminate joint-venture 1MDB-PSI joint-venture in US$700m debt due to purported higher value of PSI assetsDefence team seeks documents MACC secured from ex-Petro Saudi exec JustoThank you for following Malaysiakini's live report4.40pm - Thank you for following our live report today
4.31pm: High Court judge Collin Lawrence Sequerah allows proceedings to adjourn for the day
Proceedings will resume on Tuesday as Monday is a replacement public holiday for Deepavali
1MDB relied on representation that Petro Saudi Caymans was fully owned by PSI: Witness4.24pm: Former 1MDB CEO Shahrol Azral Ibrahim Halmi testifies that the sovereign wealth fund relied on purported representation from PSI that Petro Saudi Holdings (Caymans) is a fully owned subsidiary of Petro Saudi International
The ninth witness says that they relied on this representation when informing Bank Negara through a letter in 2009

Shahrol says that in the letter written by then 1MDB chief financial officer Radhi Mohamad to Bank Negara, the central bank was informed that Petro Saudi Holding (Cayman) is a 100 percent subsidiary of PSI and that PSI was a unit of the Saudi royal family
When lead defence counsel Muhammad Shafee Abdullah asks whether Shahrol tried to determine later if this was true, the witness admits he did not
Document stated joint-venture with Petrosaudi to benefit Malaysia's FDI4.20pm: During cross-examination by the defence on former 1MDB CEO Shahrol Azral Ibrahim Halmi, the court hears that the company's joint-venture with Petrosaudi in 2009 would benefit Malaysia in terms of locking in foreign direct investment worth US$1.5 billion
This is based on a statement that was made in the position paper and venture agreement between the companies, which had been tendered as evidence in the court
"This was the definition of the US$1.5 billion "Saudi money" which was supposed to be in the form of assets, would be counted as FDI from the country level calculation," Shahrol testifies when asked to explain the matter
"When we sign the joint-venture, 60-40, it counts against the FDI number for the country," the witness adds
The court later hears that 1MDB and Petrosaudi had also in 2009 planned to invest in the Bakun Hydroelectric Dam project (below) in Sarawak

He says that the plan came as the project was in trouble regarding its funding, as the federal government, which owned it, could not sell electricity to the Sarawak government according to their asking price
This was because the law stipulated that the electricity can only be sold to one party, which was the Sarawak state government, and thus making it difficult for the federal government to negotiate pricing
Shahrol testifies that this was also the reason that 1MDB and Petrosaudi didn't proceed with the plan
Edward Morse valued non-existant PSI 'asset' in Turkmenistan at US$3.95b3.45pm: The court hears that a valuer firm, Edward Morse, had valued oil-and-gas assets purportedly owned by Petrosaudi Holdings (Cayman) Ltd (PSI) in Turkmenistan at US$3.95 billion
According to the defence's cross-examination on former 1MDB CEO Shahrol Azral Ibrahim Halmi, the firm also valued another asset purportedly owned by PSI in Argentina at US$108m
This was based on a report that the firm prepared in 2009 when 1MDB went into a joint-venture with PSI by setting up a company called 1MDB-Petrosaudi Ltd
The joint-venture saw 1MDB pumping in cash of US$1 billion, while PSI was supposed to inject US$1.5 billion worth of assets to make up 60 percent of their partnership
However, the court hears, the assets purportedly owned by PSI in Turkmenistan was never in its possession

Defence counsel Muhammad Shafee Abdullah based on a media report by The Edge, which stated that the assets in Turkmenistan was owned by Buried Hill Energy (Cyprus) Co Ltd
According to the lawyer, The Edge had obtained all the information as they paid former Petrosaudi executive Xavier Andre Justo for rights to documents that Justo had stolen from the company
1MDB only did Internet search to confirm PSI assets ownership - Shahrol3.10pm: A former 1MDB CEO testifies that the company had relied on the words of Petrosaudi Holdings to believe that the latter actually owned oil and gas assets in Turkmenistan and Argentina
Shahrol Azral Ibrahim Halmi says that 1MDB only went as far as doing an Internet search to confirm that the offshore and on-shore properties actually belong to their joint-venture partner
For the record, PSI was using the purported oil and gas assets as their subscription in the joint venture, with the properties valued at US$2.2 billion
The partnership required 1MDB having to inject USD1b into their joint-venture company called 1MDB-Petrosaudi Ltd

"To the best of my knowledge, Casey Tang's team did an internet search," the witness says, referring to the then 1MDB executive director
Shahrol testifies that even the Internet search did not return the result of ownership, but rather information on the location of the purported PSI assets
The search also showed a territorial dispute between Russia and Turkmenistan over the area where one of the assets' was located
Answering further questions by lead defence counsel Muhammad Shafee Abdullah, Shahrol says he only learned that PSI claims on the assets were untrue sometime in 2015
This, he adds, was when he read about it in media reports
Shahrol says he, however, did not bring this matter to 1MDB board of directors after learning about it albeit he was still on board then
The matter was also never raised by 1MDB board members after they learned it, according to Shahrol
2.40pm: Proceedings resume after lunch break
12.41pm: High Court judge Collin Lawrence Sequerah allows proceedings to break for lunch
Trial will resume at 2.30pm
Najib said he was not out to destroy the country: ex-1MDB CEO12.35pm: Then prime minister Najib Abdul Razak said he was not out to destroy the country, former 1MDB CEO Shahrol Azral Ibrahim Halmi claims
During cross-examination by lead defence counsel Muhammad Shafee Abdullah, 9th witness Shahrol testifies that this was what Najib allegedly told during a meeting, also attended by senior Finance Ministry officials, at an unspecified date and venue
Shahrol is explaining why he did not put into the 1MDB board meeting minutes for late 2009 on wanted businessperson Jho Low's (below) involvement in advising both 1MDB and Petro Saudi International over the joint-venture between them

"It is similar to a lot of patterns before this deal and after that deal. Certain matters involving Jho Low was not minuted and this is to protect Najib
"This was how Najib wanted things done, I remember up close of when we were federalising TIA (Terengganu Investment Authority) into 1MDB
"There was a meeting in which Najib shared about 1MDB and that he wanted 1MDB to do things differently and quickly and to leave the old ways behind
"There was one specific meeting he said, attended by MoF senior officials, that "I am not going to destroy the country"
That is why I believed in him (Najib) and whatever was done for him was proper and good for the country, and that was the underlying reason for all decisions I made in 1MDB," Shahrol says
Witness never checked if US$700m advance in JV company is reflected in its books12.05 pm: Lead defence counsel Muhammad Shafee Abdullah further queries a former 1MDB CEO on assets purportedly worth USD2.2 billion injected by Petrosaudi Holdings (Cayman) Ltd (PSI) into their joint-venture company in 2009
The assets in Turkmenistan and Argentina, valued by a firm appointed by PSI, had affected in the joint-venture company being in USD700m debt to PSI
Shahrol Azral Ibrahim Halmi, who was 1MDB CEO from 2009 to 2013, testifies that he had never checked with the joint venture company called 1MDB-Petrosaudi Ltd if the USD700m advance value was recorded in the latter's books
Shahrol says that he did not check because he had left the matter to then 1MDB executive director Casey Tang and businessperson Jho Low
1MDB was Najib, Najib was 1MDB, says ex-1MDB CEO11.58am: "1MDB was Najib, Najib was 1MDB."This is what former 1MDB CEO Shahrol Azral Ibrahim Halmi tells the High Court during cross-examination by lead defence counsel Muhammad Shafee Abdullah
The key 9th prosecution witness is explaining the rush in signing the deal between 1MDB and Petro Saudi International
"It is important to set the context on why the decision on the PSI deal was done quickly and that I bulldozed everything through
In a nutshell, I believed this was what (then prime minister) Najib (Abdul Razak) (below) wanted

"The difference between 1MDB and Najib did not exist in my mind. 1MDB was Najib and Najib was 1MDB
"Whatever he wanted done, I needed to get it done
"At that time, i was trying to reconcile what the (1MDB) board wanted and (1MDB board of advisors) chairperson Najib wanted", Shahrol says
11.43am: Proceedings resume after the break
Jho Low was also the advisor for Petrosaudi10.30am: 1MDB-linked businessperson Low Taek Jho, or Jho Low, also played the role of advisor for Petrosaudi when the two companies were going into a joint-venture in 2009, the court hears
Former 1MDB CEO Shahrol Azral Ibrahim Halmi testifies that he knew this when Low himself informed him about the matter
The witness says that he, however, did not see that as a conflict of interest albeit Jho Low was also advising 1MDB at the same time
Under cross-examination by defence lawyer Muhammad Shafee Abdullah (below), Shahrol tells the court that Low had stated that he was trying to get a win-win situation for both 1MDB and Petrosaudi

Shafee: Now, early Sept you knew about this. Didn't it occur to you... You don't have to go to a law school or business school... He had a conflict of interest
Shahrol: He had been advising Datuk Seri Najib earlier than he was with Petrosaudi. When he called me saying he played role adviser to Petrosaudi, he was also clear to me he wanted to create a win-win between the two countries on behalf of the PM
Shafee: He is advising your potential partner, and he is advising 1MDB, attended your board meeting, heard your secrets when you make decisions. Isn't that a conflict of interest
Shahrol: That time I take him as a trusted adviser of Najib, and that the PM knew what he was doing to facilitate the deal (between Petrosaudi and 1MDB)
I didn't go more than that and took it in good faith
10.29am: Kuala Lumpur High Court judge Collin Lawrence Sequerah allows a short break to allow lead defence counsel Muhammad Shafee Abdullah and lead DPP Gopal Sri Ram to attend to a separate court matter before another judge
Shafee and Sri Ram are acting for opposing parties in a mediation in the separate court case
Ex-1MDB CEO signed agreement with PSI out of his trust on Jho Low's associate10.25am: A former 1MDB CEO only learned that its joint-venture company with Petrosaudi Holdings was in huge debt on the same day he was scheduled to seal the cooperation deal in 2009, the court hears
Shahrol Azral Ibrahim Halmi testifies that he, however, went ahead with the signing of the agreement out of trust on Casey Tang, who was then 1MDB executive director

The witness says he had queried Tang upon learning about the US$700 million debt already incurred by 1MDB-Petrosaudi Ltd hours before signing the agreement on Sept 28, 2009
Tang, who was an associate of Jho Low, then advised Shahrol that it was okay for him to ink the deal with PSI
"At that time, my perception was this was not something out of the ordinary and had been part of the negotiation that I was not involved in
"At that time, I asked Casey the question, is this ok to sign. And he said ok
So I had trusted in his advice. So I went and did it," Shahrol testifies
Agreement with PSI only gives 1MDB less than 48 hours to terminate joint-venture10.15am: A former CEO of 1MDB testifies that a joint-venture agreement he signed for the company with Petrosaudi Holdings (Cayman) Ltd (PSI) in 2009 only gave 1MDB a window of fewer than two days to terminate the cooperation
According to cross-examination by the defence on Shahrol Azral Ibrahim Halmi, the agreement he signed stipulated that 1MDB had until Sept 30, 2009 to terminate their joint-venture with PSI if 1MDB finds PSI assets injected into their cooperation was of lower value than it was said to be
Shahrol signed the agreement on Sept 28
The prosecution witness had earlier testified that the joint-venture company called 1MDB-Petrosaudi Ltd was already in US$700m debt to PSI
This was due to the three assets injected by PSI were purported of higher value than what PSI had agreed to contribute in the joint-venture
According to Shahrol, 1MDB agreed to contribute US$1 billion for 40 percent subscription of the joint-venture, while PSI injected US$1.5 billion in assets
The assets from PSI were then said to be of US$2.2 billion value, based on a valuation prepared by a company hired by PSI
1MDB-PSI joint-venture in US$700m debt due to purported higher value of PSI assets10am: Former 1MDB CEO Shahrol Azral Ibrahim Halmi starts his testimony today answering lead defence counsel Muhammad Shafee Abdullah's questions on the mechanics of joint venture the company had with Petrosaudi Holdings (Cayman) Ltd (PSI) in 2009
Shahrol (below) explains to the court that the joint venture company called 1MDB-Petrosaudi Ltd was already in USD700m debt when he signed their joint-venture agreement on Sept 28, 2009

He says this was due to two assets injected by PSI into the joint-venture entity was purportedly valued at US$2.2 billion, which was US$700 million higher than the US$1.5 billion that PSI agreed to contribute
When Shafee asks him to name the two assets, Shahrol says he can't remember their names except that one of them was an oil field in Turkmenistan
The court also hears from Shahrol that 1MDB board of directors, however, had never seen ownership papers on these assets that were purportedly owned by PSI
Defence team seeks documents MACC secured from ex-Petro Saudi exec Justo9.45am: Najib Abdul Razak's defence team seeks for documents that MACC received from former Petro Saudi International executive Xavier Andre Justo (below)

Lawyer Al Firdaus Shahrul Naing informs the High Court of this application, of which copies of the cause papers have been just served on the prosecution this morning
Lead DPP Gopal Sri Ram then applies for a case management date to allow them time to reply
Sri Ram says this is because the prosecution needs to check with MACC as some of the officers may be investigating other cases and not be in Kuala Lumpur
Judge Collin Lawrence Sequerah then fixes Oct 31 for case management of the application
According to the online cause list at ecourtservices.kehakiman.gov.my, the application lists Najib as the applicant and the prosecution as respondent, for the matter before Sequerah this morning
The application by Najib's defence team seeks for the MACC to hand over documents purportedly contained in Justo's pendrive, which is reported to be purportedly in the prosecution's custody
The application was made under Section 51A of the Criminal Procedure Code, and Section 60(3) of the Evidence Act
Section 51A of the CPC refers to the prosecution's need to supply court documents before commencement of trial, and a situation where the court may allow accused to examine certain court documents even after trial has commenced
Section 60 (3) of the Evidence Act refers to the situation where the court may order the production of material thing or document for its inspection if oral evidence makes reference to it
9.39am: Accused Najib Abdul Razak enters the dock as proceedings begin. The 25th day of Najib Abdul Razak's RM2.28 billion 1MDB trial goes on today following a two-day gap in proceedings this week
Hearing before Kuala Lumpur High Court judge Collin Lawrence Sequerah did not proceed on Tuesday and Wednesday due to the accused former prime minister needing to attend to oral submissions in his separate RM42 million SRC International case at another court
With the 1MDB trial being less than half a day on Monday due to Najib's lead counsel Muhammad Shafee Abdullah needing to go for an eye check-up, the defence today will have the whole day to resume cross-examination of the ninth prosecution witness, the sovereign wealth fund's ex-CEO Shahrol Azral Ibrahim Halmi
Three days ago, the star witness testified that the planned ceremony at Putrajaya for the official signing of the joint-venture project between 1MDB and PetroSaudi International Limited (PSI) on Sept 29, 2009, never took place
Shahrol told the court that he and then-PSI CEO Tarek Obaid signed the agreement separately instead of an earlier planned official ceremony featuring then-premier Najib and the late Saudi King Abdullah Abdul Aziz al-Saud. - Mkini

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