1MDB board never discussed acquisition of purported subsidiary Devonshire Limited Capital, ex-CEO testifies

KUALA LUMPUR, Sept 1 ― The board of directors of 1Malaysia Development Berhad (1MDB) never discussed the acquisition of its purported subsidiary, Devonshire Funds Ltd, said Datuk Shahrol Azral Ibrahim Halmi.

Testifying against Datuk Seri Najib Razak during his corruption trial today, Shahrol, who is 1MDB’s former chief executive, said the firm’s board of directors had no knowledge of Devonshire and its role despite 1MDB being listed as the “beneficial owner” in transaction documents dated sometime in March 2013.

Shahrol was being quizzed by Najib’s lawyer Wan Aizuddin Wan Mohammed who had shown him documents on numerous transactions carried out by 1MDB Global Investment Limited (1MDB GIL) to Devonshire, amounting to US$646 million (RM2.6 billion) and whether the 1MDB board of directors and its sole shareholder, Najib, had any knowledge of the transactions.

Shahrol also stated that the firm’s board of directors had no knowledge of the transactions but stopped short of saying that Najib was also not informed.

Wan Aizuddin: Can you confirm, based on this document, the beneficial owner of Devonshire is 1MDB?

Shahrol: Yes.

Wan Aizuddin: At the material time of March 2013, did the board of directors approve any acquisition of Devonshire?

Shahrol: No.

Wan Aizuddin: You can confirm that this company did not crop up in the board of directors’ meeting?

Shahrol: Yes.  

Wan Aizuddin: No resolution by shareholder or minutes by the shareholder to effect the acquisition of Devonshire?

Shahrol: Yes.

Wan Aizuddin: You can agree, based on the document, this transaction of debit from the 1MDB GIL account to Devonshire was made completely without the board of directors' knowledge and the shareholder?

Shahrol: I can speak for the board of directors — it was not raised with the board of directors. However, I can’t speak on behalf of the shareholder, on what he knows or doesn't know.

In March 2013, 1MDB, through its investment vehicle, 1MDB GIL had raised US$3 billion through the issuance of bonds and had pumped the amount into a purported joint venture company between 1MDB and Abu Dhabi’s Aabar investment PJS, called Abu Dhabi Malaysia Investment Company or ADMIC.

In the opening statement of the case, the prosecution had posited that the sums of US$646 million and US$414 million were transferred from ADMIC and another firm, EEMF, respectively to Devonshire.

The monies were then transferred to several other entities until they ended up with Tanore Finance, a company controlled by Eric Tan, a figure identified by the prosecution as fugitive businessmen Low Taek Jho or Jho Low’s shadow.

Tanore Finance then allegedly transferred a sum of US$681 million to Najib’s account, monies that the former prime minister had stated were a donation from Saudi royals.

The trial before Justice Collin Lawrence Sequerah continues tomorrow.