The Malaysian Insight

THE prosecution’s ninth witness, former 1Malaysia Development Bhd CEO Shahrol Azral Ibrahim Halmi returns to the witness stand today as Najib Razak’s trial enters its 16th day.

Shahrol is expected to conclude reading his 270-page witness statement today, after which he would be cross-examined by the defence. 

Yesterday, he testified that Najib green-lighted a bond issuance and loan valued at RM11.4 billion to finance the purchase of energy firm Tanjong Energy Holdings Ltd from tycoon Ananda Krishnan in early 2012.

Najib was said to have signed approval letters for a RM6.17 billion bridging loan and a US$1.75 billion (then RM5.23 billion) bond issuance to fund the acquisition of the independent power producer, the Kuala Lumpur High Court heard. 

Shahrol said he was not aware that 1MDB paid US$576.94 million in 2012 to a company owned by Low Taek Jho, which was meant to be a security deposit for a corporate guarantee for the Tanjong Energy bonds issuance. 

The money was paid to Aabar Investment PJS Ltd (Aabar BVI), instead of the real Aabar Investment PJS, a subsidiary of United Arab Emirates state investment vehicle International Petroleum Investment Co (IPIC).

Aabar BVI, which prosecutors said was controlled by Low and his associates, was based in the British Virgin Islands.  

Aabar BVI also received another US$790 million, which was supposed to be a security deposit for a corporate guarantee for another bond issuance to purchase Genting Sanyen Sdn Bhd. 

Shahrol said the money was eventually transferred to Najib “to be used for fraud by others”.

Najib is on trial for 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 in prison if convicted.

The 66-year-old accused 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: – October 1, 2019.

12.18pm: Sequerah adjourns the trial to Monday.

12.14pm: Sequerah asks Shafee if it is possible to conduct the cross-examination tomorrow. Shafee says he has another case as well tomorrow.

12.13pm: Shafee says he has to delay the cross-examination to Monday as he has to sift through documents before he can ask his questions.

Shafee says he needs to ask a few preliminary questions before the trial adjourns.

12.12pm: Sri Ram ends his examination in chief.

12.10am: Shahrol says Jho Low called him a couple of days later to tell him that Najib was pleased with him. Shahrol says he got an 18-month bonus that year. RM80,000 X 18 months.

12.09pm: Shahrol says that in 2011 or 2012, the prime minister had called on him to find out the status of CSR projects that 1MDB was conducting for Yayasan 1MDB.

He says he was excited and he had impolitely cut off Najib a couple of times as the former prime minister was asking questions, as Shahrol was very pleased and excited to be speaking to Najib.

“I was excited because he was the PM, you don’t get to speak to the PM.”

12.07pm: He says he received an annual sum of RM179,000 a year in allowances for being on the BOD. And an additional RM1,500 for every meeting attended.

12.06pm: Shahrol says he had received bonuses, which were determined by the board’s remuneration committee.

12.05pm: The witness says his last drawn salary from 1MDB was RM99,000.

12.04pm: Shahrol says that his salary when he joined TIA was RM80,000 a month. He says the board fixed the salary and he did not participate in that decision. He says at 1MDB there were salary increments every year based on the recommendation of consultants.

12.03pm: The witness says Jho Low and Najib appeared to be very close.

12.02pm: Shahrol says based on Jho Low’s familiarity with the layout of Najib’s home and the way he communicated with Shahrol about other family members, he believes that Jho Low was close to Najib.

Sri Ram: Did you attend any function at which the accused and any family members attended? 

Shahrol: I was not part of that circle. No.

12.01pm: Shahrol says that at multiple meetings Najib’s house, Jho Low was positive and very comfortable with Najib.

Sri Ram: Did you meet the accused’s wife with Jho Low on any of these occasions? 

Shahrol: Not that I can recall.

11.58am: Hassan Ariffin had disclosed to Shahrol what was going on in the PAC. Hassan told Shahrol that he believes that it is a political attack against Najib and to downplay Najib’s role in the decisions in 1MDB.

11.57am: He says the meeting was planned to coach him on the questions that the PAC will ask prior to the hearing.

11.56am: He says during the meeting at Farid’s house, PAC members were also there, including PAC chairman Hassan Ariffin.

11.55am: The witness say he can’t remember if it was Arul Kanda or Jho Low who had instructed him to go to Farid Rizuan, who was in charge of Najib’s image branding.

11.53am: Shahrol says that in 2015, there was a second PAC hearing. He says Arul Kanda told him to tell the PAC that he was overseas. He says Arul Kanda told him this was an instruction from PMO.

Shahrol: Arul said that the PMO wants us to hightail it out of the country before the meeting.

He says he went to Singapore to avoid the PAC meeting.

11.50am: The witness says he had to attend a PAC meeting in parliament in 2010. He was given talking points by Jho Low on what to say at the meeting. Jho Low had also arranged for Shahrol to meet the BN members on the PAC before the actual hearing. 

“I met Rahman Dahlan, and we talked about the kind of questions the PAC would be asking” 

Sri Ram: Were those questions asked? 

Shahrol: Yes. The theme of the meeting was to downplay Najib and Jho Low’s role in 1MDB.

11.47am: Shahrol says when he was called in by the police in 2015, he was asked to minimise or downplay Najib and Jho Low’s role in 1MDB, and all this was a political attack on the prime minister.

11.41am: After a short break, Shahrol is back on the stand.

11.21am: Shahrol says he was transferred to Pemandu in 2013 after four years as 1MDB CEO. 

“I was under the impression that I was transferred because I had expressed dissatisfaction with the way things were run in terms of monetary transactions and the speed with which they were done. 

“Although I was transferred, I was asked to stay on at the BOD by Jho Low to ‘manage optics’. 

“After the 1MDB issue blew up in 2015 and 2016, the BOD had gone to Najib to resign but they were ordered to stay till a new board was appointed.”

The witness concludes his statement which he commenced reading September 23.

10.47am: He says he had no knowledge of these notes but knows that 1MDB did not receive any money for the sale.

10.44am: The witness says bogus promissory notes worth millions of US dollars were issued for the 1MDB International Holdings Limited equity sale to Bridge Partners International Investment Limited. Shahrol says he found out these promissory notes were bogus when he was called in for questioning in the 1MDB case.

10.37am: Shahrol is asked by Sri Ram if he had any reason to doubt Jho Low. Shahrol says he had no reason to doubt Jho Low’s instructions as Najib’s actions were also in tandem with Jho Low’s instructions.

10.36am: He says on August 2, 2012, the board of 1MDB issued a resolution approving the sale of 1MDB International Holdings Limited to Bridge Partners International Investment Limited. In addition, the board also agreed that the proceeds of the sale of the equity be invested in any investment managed by a licensed fund manager.

10.35am: Shahrol says Jho Low and Jasmine Loo also proposed that the proceeds of the PSOSL equity sale be invested in a hedge fund at the Bridge Global Absolute Return Fund SPC operating from the Cayman Islands. 

“I was initially sceptical of the idea because the original goal was to bring back the money to Malaysia originally from investing in the JV with PetroSaudi during 2009. But when I was given action plans from Jho Low stating how this investment would be returned to Malaysia on a scheduled basis, as they had to wait for the best time to avoid losses, I agreed to bring the matter under the 1MDB board of directors agreement. Therefore, I brought this matter to the 1MDB BOD meeting for approval.”

10.31am: “At that time, Bridge Partners International Investment Limited was proposed by Terence Geh and Jasmine Loo and I accept their proposal in good faith, as this proposal is also consistent with the action plans sent by Jho Low via email to me. So, I accept the proposal assuming all of these details have been approved by Datuk Seri Najib,” the witness says.

10.29am: Shahrol: Around the end of July 2012, Jho Low informed me that the United States had imposed sanctions on Venezuela. Therefore, in order to avoid the negative perception of the US government over Malaysia due to the existing PSOSL equity ownership in the country, Jho Low and Jasmine Loo proposed that the PSOSL equity ownership of 1MDB International Holdings Limited be disposed of by selling 100% of 1MDB International Holdings Limited’s shares to Bridge Partners International Investment Limited.

10.27am: The witness is explaining about Brazen Sky Limited – a special purpose vehicle (SPV) company set up in transit to bring back investment funds from PetroSaudi Oil Services Limited (PSOSL) operations in Venezuela. The company was established on July 12, 2012, in the British Virgin Islands (BVI). All the papers and proposals for the establishment of this company are managed by Jasmine Loo and Terence Geh.

“He (Jho Low) did not tell me all the details because I gave him full trust as 1MDB general counsel. Later, Loo dealt with Azmi Tahir and Geh as directors Brazen Sky. Brazen Sky Limited’s account management is also managed by these three individuals. The Brazen Sky Limited account is opened at the bank of BSI, Singapore.”

10.04am: Shahrol is showed some written resolutions of the sole shareholder of 1MDB, which is Najib. The document is authorisation by Najib for 1MDB to raise US$3 billion which is also backed by a letter of support from Najib.

9.42am: Court is in session with Shahrol taking the stand. He is expected to finish his witness statement today.