KUALA LUMPUR – The high court here today heard that 1Malaysia Development Bhd intended to use proceeds from its initial public offering (IPO) to pay off its bank loans and debts.
Former 1MDB chief executive Mohd Hazem Abd Rahman, 49, agreed to a suggestion by former prime minister Datuk Seri Najib Razak’s lawyer, Tania Scivetti, that the entity acquired two energy assets to enhance its interest in the energy sector, and ultimately, be listed on the Malaysian stock exchange.
The two companies are Tanjong Energy Holdings Sdn Bhd and Mastika Lagenda Sdn Bhd.
The 10th prosecution witness was testifying during cross-examination by Scivetti in Najib’s trial over the misappropriation of RM2.3 billion in 1MDB funds.
Referring to the Public Accounts Committee’s Governance Management Control of 1MDB report, Scivetti questioned Hazem on whether he really said proceeds from the IPO would be used to pay 1MDB’s bank loans and settle its debts, to which he agreed.
Scivetti: Do you agree that the idea of launching the IPO would be in the interest of 1MDB, considering the raising of funds would help settle existing loans and bring cash flow to 1MDB?
Hazem: Yes.
The witness also answered in the affirmative to a question indicating the long-term rationale for the acquisition of Tanjong Energy and Mastika Lagenda was ultimately to package them as one company, and then for an IPO on the stock exchange.
He also said yes when asked whether 1MDB Energy Holdings Ltd was the company earmarked for the IPO.
Scivetti: Would you agree, considering the financial liability that 1MDB was facing in 2014, you said during the 1MDB board meeting on March 26, 2014 that the listing would have generated RM15 billion to RM25 billion in revenue?
Hazem: I am not sure about the numbers.
He agreed with Scivetti’s suggestion that 1MDB being listed would be a good expansion for the company.
Najib faces four charges of using his position to obtain bribes totalling RM2.3 billion in 1MDB funds and 21 counts of money laundering involving the same sum.
The trial before justice Collin Lawrence Sequerah continues on Monday. – Bernama, May 27, 2021
