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KUALA LUMPUR, Aug 29 — The Terengganu Investment Authority (TIA) Berhad had a new clause inserted — known to effectively give the prime minister the power to have the final say — into the company’s constitution, even before it was renamed as 1Malaysia Development Berhad (1MDB), documents produced today in court confirmed.
Rafidah Yahaya, assistant company registrar of the Companies Commission of Malaysia (CCM), today confirmed more than 150 documents lodged with CCM by several companies related to Datuk Seri Najib Razak’s corruption trial over illegal funds allegedly originating from 1MDB.
Among other things, Rafidah verified TIA’s Memorandum and Articles of Association (M&A) dated February 27, 2009 — the company constitution which established the company.
Apart from the February 27, 2009 document which formed TIA and which had 116 Articles then, Rafidah went on to confirm a separate document dated September 2, 2009 which related to the insertion of clause Article 117.
Deputy public prosecutor Mohamad Mustafa P. Kunyalam had asked Rafidah to confirm the September 2, 2009 document, which he noted was an amendment to TIA’s Memorandum and Articles of Association and that “in this amendment Article 117 was inserted into 1MDB or TIA’s M&A”.
“True,” Rafidah had replied when testifying during the trial.
The witness was not asked to elaborate on Article 117, but reports have previously shown that it requires a written approval from the prime minister before 1MDB can decide on a wide range of issues.
Rafidah also confirmed a separate document dated September 4, 2009, which contained information on TIA’s change of name to become 1MDB.
The notification for TIA’s name change to be 1MDB was just days after Article 117 was inserted.
Rafidah is the seventh prosecution witness in this trial, and will resume her testimony before High Court judge Collin Lawrence Sequerah next Tuesday.
Yesterday, which was also the first day of trial, the first prosecution witness Datuk Farizah Ahmad had verified a long list of administrative positions held by Najib during his political career, including his role as deputy prime minister from 2004 until 2009.
Najib became prime minister and finance minister from April 2009 until May 2018.
In this trial, Najib is facing four counts of abusing his position for his own financial benefit totalling almost RM2.3 billion from the sovereign investment fund and the resulting 21 counts of money-laundering.
Hearing dates have already been fixed for this trial stretching from September until November 14.
About Article 117
At the start of Najib’s trial, lead prosecutor Datuk Seri Gopal Sri Ram had in reading the prosecution’s opening statement said the case involves the funds of 1MDB which was originally TIA, adding that Najib was allegedly “instrumental in changing” the name to 1MDB.
Sri Ram had also said then that Najib had allegedly caused amendments to the company’s articles “to place himself in sole control of important matters” of the company, and that he was also 1MDB board of advisers’ chairman.
“He used that position and that of prime minister and minister of finance to do certain acts and to exert influence over the board of 1MDB to carry out certain abnormal transactions with undue haste,” Sri Ram had said when outlining what the prosecution would seek to prove, adding that Najib’s ultimate aim was allegedly to obtain self-gratification.
In the Public Accounts Committee’s (PAC) report on 1MDB that was released in April 2016, the bipartisan parliamentary committee stated that Article 117 of 1MDB’s M&A outlined three categories of decisions that require the prime minister’s written permission.
The decisions includes any changes to 1MDB’s M&A, and any appointment and removal of 1MDB directors and top management, the report said.
According to the PAC report, the third category of decisions needing the PM’s written nod under Article 117 also cover any financial commitment, investments and restructuring by 1MDB.
The third category is also stated as covering “matters relating to guarantees issued by the Federal Government of Malaysia for the company’s interests, national interests, national security” or any federal government policy.
The federal government is the one that will finalise what amounts to “national interest”, “national security” or policy of the federal government, according to the PAC report’s explanation of Article 117.
In May 2016, the Finance Ministry announced that the 1MDB’s sole shareholder Minister of Finance Incorporated had agreed to fully implement the PAC report’s recommendations, including to dissolve 1MDB’s board of advisers, to remove Article 117 and change all references of “prime minister” to “minister of finance” in 1MDB’s M&A.