Ex-CEO: Najib signed US$975m loan approval before 1MDB board knew about it, labelled ‘boss’ by Jho Low

Datuk Seri Najib Razak arrives at the Kuala Lumpur High Court September 17, 2020. — Picture by Ahmad Zamzahuri
Datuk Seri Najib Razak arrives at the Kuala Lumpur High Court September 17, 2020. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, Sept 17 — Datuk Seri Najib Razak had signed his written approval for government-owned company 1Malaysia Development Berhad (1MDB) to borrow US$975 million from a bank in 2014, even before the 1MDB board of directors were told of the plan to take on such a loan, the court heard today.

Mohd Hazem Abd Rahman, who was the CEO of 1MDB from March 2013 to early January 2015, said that Najib was also described as “boss” by Low Taek Jho in an email.

Mohd Hazem, who is testifying as the 10th prosecution witness in Najib’s criminal trial over RM2.28 billion in 1MDB funds, had previously said that Low was the “mastermind” of 1MDB transactions and was the trusted right-hand man and proxy of Najib for 1MDB matters.

Today, Mohd Hazem described the events that led to 1MDB taking on the US$975 million loan from Deutsche Bank in 2014, despite the company already being heavily in debt and amid questions of whether the company’s billions of ringgit in overseas funds actually existed.

Former 1MDB CEO Mohd Hazem Abd Rahman arrives at the Kuala Lumpur Court Complex September 17, 2020. — Picture by Ahmad Zamzahuri
Former 1MDB CEO Mohd Hazem Abd Rahman arrives at the Kuala Lumpur Court Complex September 17, 2020. — Picture by Ahmad Zamzahuri

The ‘no objection’ handwritten note by Najib

Mohd Hazem today said that Najib’s handwritten notes of “no objection” to various 1MDB matters including on the US$975 million loan were contained in two August 2014 emails sent out by Low.

The US$975 million loan was originally portrayed as being intended to repay 1MDB’s earlier US$250 million loan and to clear the way for its energy unit 1MDB Energy to be listed on Bursa Malaysia, but evidence previously produced in court showed that US$681 million of the US$975 million loan actually went to a fake company named Aabar Investments PJS Limited.

In the first email sent to then 1MDB CEO Mohd Hazem on August 14, 2014, Low had informed him of the plans for 1MDB Energy’s organisation and business structure, as well as attached various documents including a document titled “Final Decisions on 1MDB Energy Group IPO” or regarding the entity’s planned listing on the Bursa Malaysia stock exchange.

In the document titled “Final Decisions on 1MDB Energy Group IPO” which included having 1MDB borrow up to US$975 million from 1MDB, Najib had written a minute that said, “Ybh Tan Sri Ismee, noted the contents with no objection,” with the note dated as August 13, Mohd Hazem said.

“This shows that Jho Low’s plan had already been read and agreed by Datuk Seri Najib as a final decision, and was informed to Tan Sri Ismee,” Mohd Hazem said today.

Tan Sri Ismee Ismail was the chairman of 1MDB Energy’s board of directors at that time. During this same period, Najib was wearing multiple hats as prime minister, finance minister, which represented the Finance Ministry-owned 1MDB’s shareholder MOF Inc, and chairman of 1MDB’s board of advisers (CBOA).

Also attached to Low’s August 14 email was a letter where Najib had written and signed an undated note to his then principal private secretary Datuk Azlin Alias to assist 1MDB in obtaining the necessary approvals from agencies, statutory bodies and government bodies such as Bursa Malaysia for the listing of 1MDB Energy.

In the same email, Low had also attached two undated documents where then finance minister Najib signed his approval on behalf of 1MDB shareholder MOF Inc for 1MDB to borrow US$975 million from Deutsche Bank. These two signed shareholder documents are a shareholder’s resolution and a minutes by the shareholder.

Mohd Hazem said Jho Low had ordered him to tell the 1MDB board of directors that Najib as 1MDB’s shareholder had officially approved the US$975 million loan by signing those documents, with the board of directors expected to then sign on to a resolution to similarly agree to the company taking on the loan.

“This is what I meant where any decisions have already been made by Datuk Seri Najib with Jho Low’s advice, and we as the board of directors only have to comply and sign documents to verify decisions in 1MDB,” he said.

Jho Low had referred to Najib as ‘boss’ in an 2014 email on 1MDB matters, former 1MDB CEO Mohd Hazem Abd Rahman told the High Court today. — Picture via Facebook
Jho Low had referred to Najib as ‘boss’ in an 2014 email on 1MDB matters, former 1MDB CEO Mohd Hazem Abd Rahman told the High Court today. — Picture via Facebook

When asked by deputy public prosecutor Mohamad Mustaffa P. Kunyalam on who Low was referring to as “boss” in the August 14 email, Mohd Hazem replied that Low was referring to Najib.

Mohd Hazem said the document with Najib’s signed note of “no objection” to the proposals including the US$975 million loan were then presented at an August 18 meeting by the 1MDB board of directors, which was then followed by the board signing a resolution dated August 21 to approve the US$975 million loan by 1MDB Energy Holdings Limited.

While the two documents signed by Najib as 1MDB shareholder MOF Inc’s representative were undated in Low’s August 14 email, the shareholder documents were later dated August 21.

“As I explained, the two documents signed by Datuk Seri Najib that were received on August 14, 2014 through Jho Low’s email, which were obtained without any discussion and outside the knowledge of the board of directors,” he said, but said the documents received in the email were initially undated before the date was later added on.

Mohd Hazem confirmed to Mustaffa that the US$975 million loan could not have been successfully raised if Najib had not given his approval via the two shareholder documents.

Najib’s second ‘no objection’ handwritten note

In Low’s second email dated August 26 and titled “Final decision by CBOA on 1MDB Energy IPO” received by Mohd Hazem, Mohd Hazem said that Low had wanted to give instructions on 1MDB Energy Group including on the appointment of its board directors as agreed by Najib as the CBOA.

Also attached in this second email was a document titled “Final decisions on 1MDB Energy IPO”, Najib had again signed off a handwritten note, this time dated August 26 and stating “Ybhg Tan Sri Ismee, noted the contents with no objections”, Mohd Hazem said. This document was similar to the earlier document — that also included the US$975 million loan matter which Najib had written that he had “no objections” to, he said.

On September 1, 2014, 1MDB Energy Holdings Limited signed the agreement to borrow US$975 million from Deutsche Bank.

Mohd Hazem was also shown today an August 29, 2014 letter of approval and support that was signed by Najib as finance minister for 1MDB and 1MDB Energy Holding Limited’s borrowings of the initial US$250 million sum and the subsequent US$975 million sum, but said he was never told or shown such a document throughout his tenure as 1MDB CEO.

Najib’s trial before High Court judge Collin Lawrence Sequerah is scheduled to resume on October 5.

On the first day of trial, the prosecution had said it would show that more than US$681 million of the US$975 million were transferred out on September 3 and September 30, 2014 to the fake Seychelles-based Aabar Investments PJS Limited, with the funds shifted around and allegedly eventually resulting in money equivalent to RM45.8 million making its way to Najib’s bank account.

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