1MDB TRIAL | Former prime minister Najib Abdul Razak's defence team today attempted to suggest that former 1MDB CEO Shahrol Azral Ibrahim Halmi colluded with Goldman Sachs in the acquisition of Tanjong Energy Holdings Bhd.
During cross-examination by defence lawyer Wan Aizuddin Wan Mohamed today, Shahrol (above) repeatedly refuted suggestions that Goldman Sachs was hired in order for him to secure a cut from the RM10.6 billion deal.
Aizuddin had also attempted to establish that there was a "scheme" to mislead the sovereign wealth fund on Tanjong's RM10.6 billion valuation.
The deal was put before the 1MDB board on Feb 8, 2012, with a briefing by a team of Goldman Sachs officials, including its then Southeast Asia head Tim Leissner.
Shahrol was testifying at Najib's trial where he stands accused of abusing his position to obtain a gratification of RM2.3 billion in 1MDB funds. He also faces 21 other charges involving money-laundering.
In a US court in 2018, Leissner pleaded guilty to charges of money-laundering and bribery in relation to the 1MDB saga. His former company is facing a RM2 billion fine.
Referring to the minutes of the board meeting, Aizuddin accused Shahrol of "shooting down" board member VJ Ashvin's concern that the reserve price was too high given that there were only a few potential buyers.
Ashvin had also suggested that Ananda Krishnan, the owner of Tanjong at the time, was a determined seller who was willing to dispose of the asset even if the reserve price was not met.
Shahrol, however, dismissed Aizuddin's suggestion and said that 1MDB's management supported the RM10.6 valuation by Goldman Sachs.
Aizuddin: I put it to you that you shot down this comment by Ashvin and endorsed the proposal by Goldman on this purported evaluation without access to proper data.
Shahrol: I disagree. We do have access to the audited account, to imply we hentam (arbitrarily fixed a) price is grossly inaccurate.
The court was told that eventually, the board approved the acquisition. A day later, Najib, who was also the finance minister then, signed the paperwork which initiated the acquisition on behalf of the Ministry of Finance Incorporated, 1MDB's ultimate owner.
A month later, the acquisition was complete and Goldman Sachs was paid a one percent commission of the bid price.
Officially, Goldman Sachs was appointed as 1MDB's advisor for the deal on Feb 7, 2012 - a day before the 1MDB board meeting. However, Shahrol testified that Goldman Sachs had already begun work on the project two months prior.
Shahrol also explained that 1MDB had relied on the Goldman Sachs team for due diligence.
"Leissner had a close relationship (with those in Malaysia's energy industry). He had back channels with them to negotiate. He could find out what would be the appetite for the seller at the time," he said.
Aizuddin: Did you not think he would take advantage of 1MDB?
Shahrol: I believed he and Goldman Sachs would be professional.
Aizuddin: I put it to you that you agreed with this reserve price of RM10.6 billion without knowing what was the reserve price (set by) Ananda’s private vehicle Usaha Tegas Sdn Bhd (UTSB).
Shahrol: I agree.
Aizuddin also asked Shahrol if he was aware that Leissner was involved in the IPO (initial public offering) exercise for Maxis Bhd.
Aizuddin suggested that Leissner also had a "romantic relationship" with an official in one of Ananda's companies, giving Goldman Sachs an advantage in being hired for the IPO.
Shahrol responded that he was unaware of Leissner's personal relationships, but was aware of his connections with those in the energy industry.
On Najib's role in the deal, Aizuddin suggested that the then finance minister's signature was merely a formality since the board had already made a decision.
To this, Shahrol said it was part of the approval process.
Hearing before judge Collin Lawrence Sequerah continues with senior deputy public prosecutor and former Federal Court judge Gopal Sri Ram leading the prosecution. - Mkini
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