The Malaysian Insight

FORMER prime minister Najib Razak held “absolute power” over 1Malaysia Development Berhad (1MDB) like an “emperor”, its former CEO told the Kuala Lumpur High Court last week.

During cross-examination, prosecution witness Shahrol Azral Ibrahim Halmi had refuted suggestions from the defence that certain decisions could be undertaken by the board of directors without tacit approval from Najib.

When cross-examined by lead defence counsel Muhammad Shafee Abdullah, the witness said while provisions in the company constitution allowed the board some leeway in theory, Najib held tremendous power in actual practice.

This included the three principal phases of alleged money-laundering between 2009 and 2013.

Shafee: I am putting it to you that you have the wrong interpretation. You’ve just made the prime minister the emperor of 1MDB. Like the good old days in India. No checks and balance.

Shahrol: In the case of phase I, phase II and phase III, I have to say he was.

Shafee: So, he was the emperor of 1MDB?

Shahrol: Yes.

Najib, 66, 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.

Prosecutors have accused Najib of conspiring with the fugitive businessman Low Taek Jho, commonly known as Jho Low, to defraud the state investor.

Shahrol also testified that Low was the one who proposed for Article 117 to be inserted into the sovereign wealth fund’s memorandum and articles of association.

The amendment gave a sitting prime minister “kuasa mutlak” (absolute power) and overrode Article 9(a) that granted power to the federal government.

The witness said Wong & Partners was consulted for the amendment, with one Brian Chia acting as lead lawyer.

Article 117 gave Najib power to make board appointments, dissolve the board, hire or fire senior management as well as direct policy and investment in line with national interests.

The witness also testified that it was Najib’s personal relationship with the late Saudi ruler King Abdullah that led to a joint venture between 1MDB and PetroSaudi International in 2009, which was to be worth US$2.5 billion (about RM7.5 billion then).

As part of the deal, 1MBD was to inject capital of US$1 billion in cash for a 40% stake.

Shahrol, 49, testified that he had signed without question a joint venture agreement with an offshore entity based in the Cayman Islands instead of the real PetroSaudi International, resulting in US$1 billion being transferred to a fraudulent company.

Shahrol told the court he was led to believe by former 1MDB business development executive director Casey Tang Keng Chee that PetroSaudi Holdings (Cayman) Ltd was a proper company.

Of the US$1 billion 1MDB was supposed to inject into the joint venture company, US$300 million was wired to JP Morgan (Suisse) SA, which held a joint bank account 1MDB opened with PetroSaudi Holdings (Cayman) Limited under the name of JVCo.

The remaining US$700 million was remitted to an account owned by Good Star Ltd, a company allegedly controlled by Low.

The witness denied he conspired with Low to stop a government audit of 1MDB’s finances in 2009 to hide financial irregularities, including the US$700 million to Good Star.

Najib is represented by a dozen lawyers led by Shafee.

Former Federal Court judge Gopal Sri Ram leads the prosecution before judge Collin Lawrence Sequerah.

The trial continues tomorrow. – October 20, 2019.