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KUALA LUMPUR, Feb 15 — The now-fugitive Low Taek Jho’s instructions to 1Malaysia Development Berhad’s (1MDB) senior management came from then prime minister Datuk Seri Najib Razak, the government-owned company’s former CEO told the High Court today.
1MDB ex-CEO Mohd Hazem Abd Rahman said, however, he did not directly confirm with Najib as he did not have direct access to the prime minister.
Hazem was testifying as the 10th prosecution witness in Najib’s corruption trial involving more than RM2 billion of 1MDB funds.
Under cross-examination by Najib’s lead defence lawyer Tan Sri Muhammad Shafee Abdullah, Hazem said that any meetings he and other 1MDB senior management officials had with Low on 1MDB matters were carried out in Low’s apartment at 8 Kia Peng near Kuala Lumpur City Centre (KLCC) instead of at 1MDB’s office.
Asked by Shafee why he was asked by Low to meet at the apartment, Hazem bluntly said “because he’s not part of 1MDB”, further explaining that Low could not “appear” at 1MDB’s office as “he is not supposed to be known to be giving instructions to 1MDB.”
Shafee: So you are saying although Jho Low is giving advice, in fact primarily all the advice comes from Jho Low, you have somehow been led to believe that Jho Low himself cannot appear and be known to 1MDB?
Hazem, however, confirmed that the senior management knew that Low was giving advice and running the show at 1MDB, further confirming that he understood that he would have to obey instructions from Low from their very first meeting in July 2012 at a hotel in Putrajaya in the presence of Najib’s then principal private secretary Datuk Azlin Alias.
Hazem had previously described Low as Najib’s trusted right-hand man, proxy and special adviser for 1MDB, with the July 2012 meeting taking place before Hazem joined 1MDB as chief operating officer.
Today, Shafee questioned if Hazem found it common sense for Low to be kept a “secret”, with Hazem then saying that this was the practice and further highlighting Low’s instructions as allegedly originating from Najib as the prime minister.
Shafee: Did it appeal to you at all in your common sense, corporate sense, why Jho Low has to be secret, why has advice has to be secret among certain people, Jho Low can’t even make appearance in 1MDB, meetings are all done secretly in his house. As a COO to CEO, doesn’t it occur to you there is something not right here?
Hazem: In the traditional sense, in corporate governance sense, it doesn’t make sense. But coming from the message that Jho Low is basically all the instructions from the prime minister.
Shafee: Which you did not confirm with the prime minister?
Hazem: I think yeah, there is no confirmation as well as verifying that these instructions are cleared by the prime minister.
Hazem said that while he had not personally asked Najib to confirm instructions from Low — especially instructions that did not seem to make financial sense or common sense — on 1MDB, he pointed out however that there were occasions where Low was present in meetings with the prime minister and that he took it that “Jho Low’s plans are sanctioned by the prime minister himself.”
Hazem had previously said that when he arrived at Najib’s house, Low was already there in a previous discussion with the prime minister, before the prime minister met with him and Low in a subsequent meeting.
Shafee: Now why do you presume that that meeting which you did not attend with Jho Low, where he was sort of meeting with the prime minister, why do you assume that whatever instructions he gave later on are all from the prime minister, even if it doesn’t sound logical? Why do you presume that?
Hazem: These are all messages from Datuk Azlin, even the rest of the special officers in the prime minister’s office said the same thing, including the likes of Amhari and Wan Shihab.
Shafee then suggested clarifying directly with Najib to get direction on 1MDB matters would be the best way in terms of corporate governance, with Hazem agreeing that this would be the best way if he had access to Najib.
Hazem, however, said he did not have such access: “Well, officially, if I can, if I have the access. I think I don’t have the access, I spoke to my chairman.”
Previously, Hazem had spoken of how he had sought to raise his concerns regarding 1MDB matters through 1MDB board of directors’ then chairman Tan Sri Lodin Wok Kamaruddin to Najib’s attention.
Hazem earlier today confirmed to Shafee that he had never personally clarified or verified with Najib on matters that were conveyed or represented by Low, and agreed that he had relied completely on the accuracy of information that came from Low.
Asked to describe Low’s advice on 1MDB matters, Hazem told Shafee: “I think generally speaking his advice is something that has got to do with things that would require high speed, some of them made sense, and some of them may not be making a lot of sense I guess from a financial point of view.”
Hazem said he did argue with Low on such advice that did not seem to make sense by questioning him privately using Blackberry messages, but that Low “rarely” changed his mind when questioned on such matters.
Among other things, Hazem highlighted Low’s plans which required the approval of 1MDB’s shareholder did eventually receive such approval. At that time, Najib signed off on 1MDB documents on behalf of the company’s shareholder MOF Inc in his role as finance minister.
Hazem confirmed that the 1MDB board knew the role that Low was playing over the company. He added that he had checked and discussed Low’s instructions regarding 1MDB with company chairman Lodin and Tan Sri Ismee Ismail who was at that time one of the directors on the board.
Hazem also confirmed that Najib’s then aide Azlin knew about Low’s actions and had encouraged him to listen to the latter.
He claimed that Low intentionally blind copied emails sent to him to other individuals that he did not know were included in the sending out of the email, as he would find that the 1MDB senior management and Azlin knew about the emails’ contents when he checked with them occasionally.
Asked by Shafee if Low had claimed to get directions from Najib or Azlin, Hazem replied: “He never said that, he doesn’t say either. Basically as far as we know, he represents PMO (Prime Minister’s Office).”
Hazem said he took it that Low’s instructions were planned with the prime minister, citing as example an August 14, 2014 email from Low where an undated shareholder’s resolution signed by Najib was attached in the email.
“I mean to us, to me especially, if I receive an email with a resolution signed by the prime minister, I took it that it’s an instruction basically,” Hazem said, but agreed with Shafee that the assumption may not be accurate now.
Shafee said Low’s role as the actual decision-maker for 1MDB was akin to a shadow director as the company’s management was accustomed to following Low’s instructions and that this would be against company law, with Hazem agreeing to such a suggestion.
While confirming that Najib had contacted him twice through phone calls to ask him to have the auditing of 1MDB accounts completed quickly and regarding Yayasan 1MDB matters, Hazem also agreed with Shafee that Najib did not get involved in the day-to-day running of the company by giving specific directions in the phone calls and that nothing inappropriate was communicated to him by the prime minister in those calls.
Shafee suggested that Hazem could have directly contacted Najib if he found something troubling in 1MDB such as a person outside the company illegally giving directions, and that Hazem could have made appointments to meet Najib.
Recalling that the phone calls were made from an office number instead of Najib’s mobile phone and confirming that he did not try to meet Najib, Hazem stressed that he did not have “direct access” to Najib as his avenue of access would be via Lodin and Azlin, as Hazem was close to Azlin.
Hazem agreed with Shafee that he would never know the truth regarding Low’s instructions unless he spoke to the prime minister who was also 1MDB’s shareholder and that this would remain an assumption, further agreeing that this was a dangerous way to conduct a business involving billions of US dollars and that he now realise in hindsight that the matter was off.
Shafee asked if Hazem would have done things differently in 1MDB if he was given a chance to go back in time.
Hazem replied: “I would say I would rather not even be part of 1MDB, I would quit, because I don’t think anybody in 1MDB then would be brave enough to do what you said.”
Najib’s 1MDB trial before High Court judge Collin Lawrence Sequerah resumes tomorrow morning.