1MDB trial: Ex-CEO says joint venture with Aabar Investments a bust

KUALA LUMPUR, Oct 1 — The much-touted US$6 billion (RM25.1 billion) joint venture between Abu Dhabi’s Aabar Investments PJS and 1Malaysia Development Berhad (1MDB) proved to be a bust when the entity formed to manage the Malaysian sovereign investment fund went inactive, Datuk Shahrol Azral Ibrahim Halmi told the High Court today.

Shahrol, testifying against former prime minister Datuk Seri Najib Razak, said 1MDB had pumped in US$3 billion into the joint venture company called Abu Dhabi Malaysian Investment Company Limited (ADMIC).

However, he said ADMIC did not carry out any investment activities.

To make matters worse, Aabar also did not provide its share of the US$3 billion, contrary to the agreement signed on April 16, 2013, Shahrol added.

“The original purpose of ADMIC is to act as an SPV for investment with a 50:50 stake between 1MDB and Aabar. However, after the US$3 billion bond issuance by 1MDB GIL, there were no activities by ADMIC and there were no other funds injected into ADMIC as what was plan earlier on,’’ said Shahrol.

Shahrol was referring to the special investment vehicle (SPV) set up by Malaysia with Aabar, called 1MDB Global Investment Limited (1MDB GIL), that aimed to raise US$3 billion funds through bonds.

The prosecution witness also told the court that ADMIC was mooted by financier Low Taek Jho, supposedly for another joint venture initiative dubbed Project Catalyze.

Shahrol said he had no personal knowledge of what happened to the US$3 billion that was channelled into ADMIC as he had left his position as 1MDB chief executive on March 16, 2013.

Lead prosecutor Datuk Seri Gopal Sri Ram asked Shahrol if Najib had ever asked him whether or not Aabar ever wired in its share of the fund, to which the former 1MDB chief executive said no.

Shahrol also said Najib had never called for a board meeting to discuss the whereabouts of the monies paid out by the firm following the expose about the 1MDB scandal in 2014.

Shahrol also explained that 1MDB had accumulated RM30 billion in debt by the time he left as chief executive in 2013.

He said the debt was left completely to the government of Malaysia as 1MDB is fully owned by the Finance Ministry.