KUALA LUMPUR – The high court today was told that the management of 1Malaysia Development Bhd (1MDB) had conned former prime minister Datuk Seri Najib Razak and the company’s board of directors into entering an investment agreement with its purported business partner PetroSaudi International Limited.
Former non-executive director of 1MDB Tan Sri Ismee Ismail, 58, who agreed with Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah’s suggestion, also admitted that several members of the management had misled Najib and the BOD by crafting detailed proposals to enter into the investment agreement.
The lawyer then suggested that the said proposals were crafted by 1MDB’s former general counsel Jasmine Loo Ai Swan, former chief financial officer Azmi Tahir, former executive director Casey Tang Keng Chee, and former chief executive officer Datuk 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 joint venture company 1MDB-PetroSaudi International Limited that it had bought at US$1 billion (RM4.2 billion) into an Islamic loan to the same joint venture company.
The deal saw 1MDB agreeing to sell off 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 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 the conversion to Murabahah notes further, Shafee told the court that the 1MDB management did a “magic show” whereby the sovereign wealth fund would get the US$1.2 billion in 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 from Najib to do this (proposals). This was a very detailed nitty-gritty of paperwork convincing enough for the BOD. Do you agree with me?”
Ismee: “Yes.”
Shafee: “In your wildest imagination, would you think that Najib, then PM, would be involved in directing how to con 1MDB? Could you imagine?”
Ismee: “I don’t think any PM would have time for that.”
The 13th prosecution witness also agreed that 1MDB faced difficulties during an audit process when audit firm Ernst & Young (E&Y) queried on the US$700 million transferred out from 1MDB to the joint venture.
Shafee: “Do you agree with me that the management was dragging its feet for so long without answering E&Y?”
Ismee: “Yes.”
Previously, it was reported that 1MDB’s US$1 billion was placed in the joint venture, paid out in two batches of US$700 million and US$300 million.
US$300 million was channelled to the joint venture company while US$700 million was paid to Good Star Limited, a company owned by Low.
Shafee: “Shahrol Azral was the culprit behind this as he was working hand-in-hand with Jho Low and he misled the entire BOD. 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 Datuk Collin Lawrence Sequerah continues tomorrow. – Bernama, March 23, 2022
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