KUALA LUMPUR – Monies transferred from 1Malaysia Development Bhd (1MDB) and its former subsidiary SRC International Sdn Bhd into fiduciary funds handled by BSI Bank in Singapore were never used for investments, the high court heard today.
Former BSI banker, Kevin Michael Swampillai, who used to work as the bank’s head of wealth management services in the city state, said the monies were largely used to fund the lavish lifestyle of fugitive businessman Low Taek Jho, or Jho Low.
Swampillai, who is testifying as the 44th prosecution witness in Datuk Seri Najib Razak’s trial over the alleged misappropriation of RM2.28 billion of 1MDB funds, reiterated that these monies were transferred in and out of the fiduciary funds as an “optical illusion” to conceal the financial transactions from further scrutiny.
The transactions also raised concerns among BSI employees at the time as these fiduciary funds often used investment instruments such as equity shares or loans in the form of lending agreements and promissory notes that had no economic benefit, said Swampillai.
“In hindsight, with what has come to light, the yacht, the private jets, real estate. It’s clear that these monies were never intended to come back (to Malaysia) as these promissory notes had no economic sense because they did not provide any repayment date,” he said.
Swampillai had previously testified that there were alternative investment structures such as insurance and trust structures, but Low had opted to use fiduciary-fund structures instead.
In his cross-examination, Najib’s lawyer Tan Sri Muhammad Shafee Abdullah questioned Swampillai on whether 1MDB’s former chief financial officer Azmi Tahir and ex-chief executive Mohd Hazem Abd Rahman would be able to determine whether these monies were intended as bona fide investments.
Swampillai answered that it would be “unbelievable” for Azmi, who is a chartered accountant, to claim that these transactions were for genuine investments.
The former banker, however, said he had no assessment of Hazem, as he had not met the latter during his tenure with BSI.
Najib, 70, is facing four charges of using his position to get bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering.
The hearing before judge Datuk Collin Lawrence Sequerah continues tomorrow. – The Vibes, April 17, 2023
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