1MDB TRIAL | Najib Abdul Razak’s defence team accused former 1MDB CEO Shahrol Azral Ibrahim Halmi of hoodwinking the sovereign wealth fund’s board.
He was accused of not scrutinising the funds’ US$1.75 billion bond documents which did not state that the UAE’s International Petroleum Investment Company (IPIC) would be the guarantor for the bonds.
During the trial of the former prime minister’s RM2.28 billion 1MDB corruption case today, defence counsel Wan Aizuddin Wan Mohammed cross-examined ninth prosecution witness Shahrol over the allegation.
Wan Aizuddin was questioning Shahrol over the reason that IPIC was not listed as a guarantor in documents linked to the bonds.
Among the documents was an Agency Agreement between 1MDB, its subsidiary 1MDB Energy (Langat) Limited, the Bank of New York Mellon (London Branch), the Bank of New York Mellon (Luxembourg) S.A. and BNY Mellon Corporate Trustee Services Limited, dated Oct 19, 2012.
1MDB and IPIC entered into an inter-guarantor agreement involving the bonds in May 2012.
The US$1.75 billion in bonds were part of the financing secured by 1MDB to acquire independent power producers (IPPs), namely Tanjong Energy Holdings Bhd from tycoon Ananda Krishnan, and Genting Sanyen Power Sdn Bhd from Genting Bhd.
When the lawyer asked the witness where was IPIC within the agreement, which was tendered as a court exhibit, Shahrol said he could not explain because the document was prepared by 1MDB’s then-general counsel Jasmine Loo with input from Goldman Sachs.
Goldman Sachs was the investment bank hired by 1MDB to be the financial advisor in the issuance of the bonds.
During the cross-examination by Wan Aizuddin, Shahrol admitted that he did not read the whole document, which was brought to his attention by Loo, before signing it.
Shahrol, however, disagreed with the defence counsel’s assertion that the former was involved in the scheme to hoodwink 1MDB’s board of directors and embezzle billions of ringgit.
Wan Aizuddin: Are you telling this court that for the US$1.75 billion notes involving a guarantee from 1MDB, you merely signed the (single page of the document) without looking through the whole document? You are the CEO (of 1MDB).
Shahrol: Yes.
Wan Aizuddin: This act of taking this lightly is on purpose as you were in a scheme and conspiracy with Jasmine Loo, (businessperson) Jho Low, Goldman Sachs, (IPIC’s then managing director) Khadem Al-Qubaisi and (then Aabar Investments PJS CEO) Mohamed Badawy al-Husseiny, to embezzle money.
Shahrol: I disagree.
Wan Aizuddin: As the CEO and managing director of 1MDB, you have failed to act in the best interest of the company and (to fulfil) your fiduciary duty to the company by letting this happen.
Shah: I disagree.
Meanwhile, the witness agreed with the defence lawyer’s contention that the possibility of an alternate annual interest rate of 5.75 percent for the US$1.75 billion bonds was not brought up before 1MDB’s board.
Wan Aizuddin was referring to the 1MDB Energy (Langat) Sdn Bhd private placement memorandum dated Oct 17, 2012, involving US$1.75 billion in guaranteed notes due in 2022.
Shahrol agreed with the lawyer that Goldman Sachs did not provide any evidence to the 1MDB board that the 5.75 percent interest rate was the best rate they could get.
The witness testified that he went along with it because at that time he was under the impression that it is something already decided on at the highest level, due to the alleged involvement of a government-to-government aspect to the whole matter, as well as due to the paperwork done by Loo and Goldman Sachs, among others.
He added that this government-to-government aspect was accentuated by the purported involvement of then-premier Najib and the UAE crown prince.
Proceedings will resume before Justice Collin Lawrence Sequerah on Aug 3.
Former premier Najib is on trial over four charges of abusing his position to obtain gratification and 21 counts of money laundering in relation to RM2.28 billion in 1MDB funds. - Mkini
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