Najib Was Conned Over Petrosaudi Investment Deal Court Told

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Najib Razak at the Kuala Lumpur High Court today for his corruption and money laundering trial. (Bernama pic)KUALA LUMPUR: The High Court was told today that the management of 1MDB had conned former prime minister Najib Razak and the company’s board of directors into entering an investment agreement with its purported business partner, PetroSaudi International Limited (PSI).
Former non-executive director of 1MDB Ismee Ismail, 58, who agreed with Najib’s lead counsel Shafee Abdullah’s suggestion, also admitted that several members of the management had misled Najib and the board by crafting detailed proposals to enter into the investment agreement.
The lawyer then suggested that the proposals were crafted by 1MDB’s former general counsel Jasmine Loo, former chief financial officer Azmi Tahir, former executive director Casey Tang and former CEO Shahrol Azral Ibrahim Halmi.
Shafee: This is a 100% con job. All the proposals were crafted by the 1MDB management. It was detailed crafting by the management.
Ismee: Yes.
The senior counsel was referring to the deal where 1MDB agreed to convert its 40% stake in the 1MDB-PSI joint venture company that it had bought at US$1 billion into an Islamic loan to the same joint venture company.
The deal saw 1MDB agreeing to sell the 40% share to the joint venture company by giving, on paper, the Islamic loan via Murabahah notes to the joint venture company at a value of US$1.2 billion.
With the conversion to the Murabahah notes, the joint venture company would on paper owe US$1.2 billion to 1MDB, effectively giving 1MDB a paper profit of US$200 million after accounting for the initial US$1 billion.
Explaining further on the conversion to the Murabahah notes, Shafee told the court that the 1MDB management did a “magic show”, whereby the sovereign wealth fund would get the US$1.2 billion on paper, but not the actual cash.
Shafee: From Shahrol Azral’s testimony, we got to know that he was being directed by fugitive businessman Low Taek Jho, better known as Jho Low, purportedly it was from Najib to do this (proposals). This was a very detailed piece of paperwork that was convincing enough for the board. Do you agree with me?
Ismee: Yes.
Shafee: In your wildest imagination, do you think Najib, the then prime minister, would be involved in directing how to con 1MDB? Can you imagine?
Ismee: I don’t think any PM would have time for that.
To another question, the 13th prosecution witness also agreed that 1MDB faced difficulties during an audit process when Ernst & Young (E&Y) queried it on US$700 million that was transferred out from 1MDB to the joint venture.
Shafee: Do you agree with me that the management was dragging its feet for so long and not answering E&Y?
Ismee: Yes.
Previously, it was reported that 1MDB’s US$1 billion was placed in the joint venture and it was paid out in two batches of US$700 million and US$300 million.
The US$300 million was channelled to the joint venture company while the US$700 million was paid to Good Star Ltd, a company owned by Jho Low.
Shafee: Shahrol Azral was the culprit behind this as he was working hand-in-hand with Jho Low and he misled the entire board. This is why 1MDB is suffering today.
Ismee replied in the affirmative.
Najib, 68, is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.
The trial before judge Collin Lawrence Sequerah continues tomorrow. - FMT

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