1MDB ex-CEO never suspected US$700m went to Jho Low despite stonewalling, denies in conspiracy

Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi arrives at the Kuala Lumpur High Courts Complex October 30, 2019. — Picture by Yusof Mat Isa
Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi arrives at the Kuala Lumpur High Courts Complex October 30, 2019. — Picture by Yusof Mat Isa

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KUALA LUMPUR, Oct 30 — The former CEO of 1Malaysia Development Berhad (1MDB) today said he was unaware that US$700 million of the government-owned company’s funds had actually went to fugitive financier Low Taek Jho in 2009 instead of to a business partner’s purported affiliate.

Former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi said he did not suspect that anything was amiss involving the US$700 million despite 1MDB’s Saudi-linked partner PetroSaudi International (PSI) Limited’s evasive behaviour over the funds, owing to his belief that the joint venture between the two companies was linked to Malaysia-Saudi Arabia ties.

Testifying against Datuk Seri Najib Razak in the latter’s corruption trial, Shahrol retraced the events in 2009 where 1MDB pumped in US$1 billion in the joint venture, including US$300 million to the joint venture firm and US$700 million to PSI’s purported affiliate Good Star Limited at PSI lawyers’ instructions.

After 1MDB board expressed unhappiness and asked Shahrol to recover the US$700 million from Good Star in order to pay it directly to the joint venture company, Shahrol said PSI pushed back on this and refused to do so.

Shahrol pointed out that PSI CEO Tarek Obaid and official Patrick Mahony had both refused to return the US$700 million to 1MDB by claiming it would result in a breach of contract.

Shahrol also confirmed 1MDB was unable to check on the status of the US$1 billion that was split into payments of US$700 million and US$300 million, noting “we tried to get accounts of the joint venture company but we were unable to, we were just getting stonewalled by Patrick and Tarek Obaid.”

While confirming that he was entitled under the law to check the account statements as a director in the joint venture company, Shahrol said 1MDB’s email requests to PSI for such documents were met with “a lot of excuses” and that 1MDB never got these documents.

Najib’s lawyer Tan Sri Muhammad Shafee Abdullah then asked if Shahrol started to get “suspicious” following the chain of events surrounding the US$1 billion.

“At that time, still no, because I didn’t have any other context to compare with, this is my first time dealing with anything close to this nature - a big G2G deal and people on the other side of stature that is high, so at that time I just took it at face value what Jho and Casey was telling me,” Shahrol replied, referring to his understanding of the deal as a government-to-government deal.

He also referred to businessman Low Taek Jho who purported to be Najib’s adviser then and also Casey Tang who was 1MDB executive director and tasked with handling the joint venture’s matters.

While confirming that he could have asked the bank for the joint venture company’s account statements as he was a signatory, Shahrol said he had not attempted to do so.

“In my mind, there was no reason to be suspicious and I left it to Casey and also with Jho to manage their relationships. And I felt my focus should be on what the joint venture company should be investing in,” Shahrol said.

Former prime minister Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court October 30, 2019. ― Picture by Firdaus Latif
Former prime minister Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court October 30, 2019. ― Picture by Firdaus Latif

When Shafee said no investments could be made if no money remained in the joint venture company, Shahrol said he had “assumed the money was there” or at least the US$300 million.

Shahol disagreed that his suspicions had been aroused then, further denying that he was a participant of an alleged “conspiracy” to defraud 1MDB of its funds.

Shafee: Either as a reasonable person your suspicion must be aroused, or you are part of the conspiracy.

Shahrol: I disagree with that.

Shahrol agreed that the probable reason why PSI officials refused to show the account statements to 1MDB was due to the funds having been diverted for other purposes.

Shafee: Now with hindsight, you realise why they stonewalled you, why they were not telling you the state of account, because Jho has taken the bulk of the money somewhere and has paid Tarek US$85 million and Tarek has paid Patrick US$33 million. That’s the reason why they cannot show you.

Shahrol: That’s probably why.

Shafee: Now you know that the person you depended on apart from Jho Low is Casey Tang, now you know he is part of the fraud and conspiracy, and that’s why you were not getting results from him.

Shahrol: Yes.

Shafee today showed bank documents of the US$700 million flowing from 1MDB to Good Star, which then paid US$85 million to Obaid, who in turn gave US$33 million to Mahony.

Shahrol had confirmed that he did not know then that Good Star actually belonged to Low, as PSI had said it was its affiliate.

Shahrol had previously testified that 1MDB’s US$1 billion “investment” — including the US$700 million — resulted in zero returns for the company.

Casey Tang’s salary

Shahrol did not recall the exact figure for Tang’s monthly salary while the latter was employed in 1MDB from 2009 to 2011, but said it would have been above RM50,000 each month.

Saying that bonuses for all 1MDB staff are based on their individual performances and the company’s performance, Shahrol said Tang received relatively high bonuses as his performance was rated quite high.

Asked by Shafee, Shahrol said he was the one who rated Tang’s performance.

Shahrol is the ninth prosecution witness against Najib in the trial.

The trial before High Court judge Collin Lawrence Sequerah resumes tomorrow at 2.30pm.

Najib’s 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.

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