Najib approved his own RM120,000 annual salary for 1MDB role, says ex-CEO

KUALA LUMPUR, Sept 25 — Datuk Seri Najib Razak had personally approved the RM120,000 that he would receive each year as the chairman and member of 1Malaysia Development Berhad’s (1MDB) board of advisers, the company’s former CEO said today.

Datuk Shahrol Azral Ibrahim Halmi, 1MDB’s former CEO, said that the company’s directors had on June 6, 2010 signed on a directors circular resolutions to adopt the amount approved by Najib.

Shahrol said 1MDB directors had signed to “confirm and approve the payment of remuneration” to Najib in the form of RM120,000 yearly as chairman of the board of advisers, and also the sum of RM96,000 yearly that he had approved for each member of the board of advisers.

“The remuneration amount was fixed by Datuk Seri Najib himself in his capacity as chairman of the board of advisers. After this amount was approved by Datuk Seri Najib, then only we will bring this into the board of directors’ meeting to have its approval finalised,” he told the High Court today.

At that time, Najib wore multiple hats, including as the prime minister whose prior written approval was required for the appointment and removal of directors and senior management of 1MDB and for major financial decisions, and as the sole shareholder of 1MDB through the Minister of Finance Incorporated in his role as Finance Minister, and as chairman of the board of advisers.

Shahrol had previously said 1MDB started life as a RM2 company in February 2009 that was previously known as Terengganu Investment Authority Berhad (TIA), confirming today that 1MDB had no other funds in its early stages other than a RM5 billion debt it had taken on in May 2009 with the federal government’s guarantee.

Shahrol also said Najib had represented MOF Inc in signing a document to approve the rate of annual payments to the board of directors with effect from April 1, 2011.

According to the document, the approved annual sum is RM230,000 for Tan Sri Che Lodin Wok Kamaruddin, RM179,000 for Datuk Ismee Ismail, Datuk Ong Gim Huat, Shahrol, Ashvin Jethanand. Shahrol said he did not recall any amendments to the yearly pay amount after April 2011.

Najib’s ongoing 1MDB trial involves 25 criminal charges — four counts of abusing his position for his own financial benefit totalling almost RM2.3 billion allegedly originating from 1MDB and the resulting 21 counts of money-laundering.