The Malaysian Insight

NAJIB Razak’s 1Malaysia Development Bhd trial enters its 15th day today with the ninth prosecution witness, former Terengganu Investment Authority CEO Shahrol Azral Ibrahim Halmi, returning to the stand.

On Thursday, Shahrol told the court that the former prime minister had pushed for the Social Security Organisation (Socso) to give a RM3 billion loan to 1MDB to allow the entity to loan a similar amount to PetroSaudi International Ltd.

Citing 1MDB’s minutes dated March 30, 2011, he testified that Najib had approved the plan.

The US$750 million loan was to be focused on investments in the London-based Maybourne Hotel Group, SRC International Sdn Bhd and Kuala Lumpur International Financial District, later renamed the Tun Razak Exchange, said Shahrol.

It was the first time that Socsco was mentioned in the 1MDB scandal. The witness did not reveal whether Sosco approved any loan to the state investor.

Shahrol also said Najib met former Goldman Sachs CEO Lloyd Craig Blankfein on November 22, 2009 to court the investment bank’s support for further 1MDB ventures.

1MDB intermediary Low Taek Jho and former Goldman Sachs Asia CEO Tim Leissner were the “matchmakers” for the meeting at the Four Seasons Hotel, the court heard.

Shahrol said an area of interest was energy, particularly the independent power producer sector, adding that the following year, he wrote a letter to Najib, proposing investments in the said sector.

Najib is on trial on four counts of power abuse to enrich himself with RM2.3 billion from 1MDB and 21 counts of laundering the same amount. He faces up to 20 years’ prison upon conviction.

The 66-year-old is represented by a dozen lawyers, led by Muhammad Shafee Abdullah.

Former Federal Court judge Gopal Sri Ram leads the prosecution, while Kuala Lumpur High Court judge Collin Lawrence Sequerah presides.

The Malaysian Insight brings you today’s proceedings live:

4.47pm: Court is adjourned.

4.15pm: Sri Ram: Who put Jho Low in this position of power, from your observation? 

Shahrol: From my observation, I didn’t know how embedded Jho Low was in Najib’s household. I first got an inkling in April 2009 when Jho Low brought me to Najib’s residence in Putrajaya.

4.13pm: To Shahrol’s understanding, Najib everything Jho Low was doing because their actions were in tandem with each other.

4.12pm: Shahrol tells the court that Jho Low operated in silos, keeping MoF, the PM’s department and also 1MDB apart. Many people were on a need to know basis so that they could not see the whole picture.

3.34pm: Court goes through the JV agreement between Aabar and TRX Co.

3.31pm: Shahrol says on October 15, 2012, the 1MDB board met to go over a proposed collaboration with Aabar for the development of TRX. The terms of the collaboration are as follows: 

1) Aabar will provide funding and expertise for the development of theTRX
2)  The TRX land, valued at RM1.78 billion, will be transferred to TRX Co, which will be 100% owned by 1MDB 
3) The joint venture will be unincorporated
4) No interest will be paid on either the land or the cash contribution
5) TRX Co will enter into a musyarakah agreement with Aabar
6) The profit will be split 50:50 between the parties but with no profit guarantee
7) Aabar will entitled to appoint two out of five Directors in TRX Co
8) Aabar will be entitled to nominate the CEO of TRX Co

3.19pm: The court goes through phase three of 1MDB transactions. This involves dealings over the Tun Razak Exchange real estate development in Kuala Lumpur.

2.52pm: He says after the investigation into 1MDB was done, he then realised that the deposit money was arranged by Jho Low to go into his accounts and subsequently Najib’s accounts.

2.50pm: Shahrol says the purchase of Genting Sanyen was done using a bridging loan of RM700 million and distributing bonds worth US$1.75 billion: 

“I admit there is a huge surplus from the financing for the acquisition. However, I would like to reiterate that I did not know that the extra money for security deposit payments amounting to US$790,354,855.00 to Aabar was to be swindled by other parties.”

2.38pm: Court resumes.

12.55pm: Court breaks for lunch.

12.50pm: Lead prosecutor Gopal Sri Ram summarises that Genting Sanyen was bought with US$1.75 billion worth of bonds and RM800 million from Affin Bank, the deal’s lead arranger.

12.02pm: Shahrol says they were to buy the independent power producer for RM2.75 billion, adding that he was to have full power to sign documents on the deal.

He says he was also in charge of “fundraising” for the deal, by obtaining a RM1 billion loan and distributing bonds worth US$1.75 billion (RM7.3 billion) through 1MDB Energy (Langat) Ltd.

All this had to be run by “shareholder” Najib, who was prime minister and finance minister, he says.

11.56am: Shahrol details 1MDB’s acquisition of Genting Sanyen Sdn Bhd with 100% equity from Mastika Lagenda Sdn Bhd. He says the project, named “Greyhound”, was led by Tim Leissner and Loo.

Project Greyhound had the same modus operandi as the Tanjong Energy deal, whereby Goldman Sachs would broker the deal, he says.

11.50am: Court resumes.

11.15am: Court takes a 15-minute recess.

10.32am: Shahrol says he cannot remember if 1MDB profited from the purchase of Tanjong Energy. He says profits should have come once Tanjong Energy was publicly listed, but this never materialised.

10.21am: Shahrol says he has not seen Jasmine Loo since he left 1MDB in 2013. He says the last time he saw Terence Geh was in 2014 or 2015.

10.16am: Documents for the witness are being verified. Shahrol goes through documents on 1Malaysia Development Bhd’s takeover of Tanjong Energy Holdings Sdn Bhd.

9.48am: Court is in session. Former Terengganu Investment Authority (TIA) CEO Shahrol Azral Ibrahim Halmi takes the stand. – September 30, 2019.