KUALA LUMPUR, Aug 17 — A former CEO of 1Malaysia Development Berhad (1MDB) today confirmed to the High Court that he was effectively “led by the nose” as he took instructions from businessman Low Taek Jho who was virtually the real CEO of the government-owned company.

Former 1MDB CEO Mohd Hazem Abd Rahman however explained his belief that instructions from Low — better known as Jho Low — were actually the same as instructions from Datuk Seri Najib Razak who was the prime minister then.

Mohd Hazem also told the court today that this was proven through events such as Low’s presence at a meeting with the prime minister on 1MDB affairs. This was despite Low not having any official 1MDB positions.

Mohd Hazem went on to assert his belief that Najib as the prime minister was part of Low’s “scheme” for 1MDB, also claiming that Najib had allegedly known that 1MDB’s funds had gone missing but that the then prime minister was purportedly putting on a “drama” by allegedly pretending to enquire about the funds’ status.

Mohd Hazem said all this while testifying as the 10th prosecution witness against Najib in the latter’s trial involving more than RM2 billion of 1MDB funds.

Under cross-examination by Najib’s lawyer Tan Sri Muhammad Shafee Abdullah, Mohd Hazem agreed that former 1MDB senior management officials Terence Geh and Jasmine Loo were directly under Low’s control and that he knew from the beginning when he became CEO that the duo’s loyalty was only to Low and not to 1MDB. The two officials were supposed to be under Hazem’s supervision as the CEO.

While acknowledging that the two 1MDB officials acted solely at Low’s direction and that they were not necessarily acting for the interests of 1MDB, Mohd Hazem said he did not do anything to avoid this situation as he equated Low and Najib together.

Shafee: Now I want to confront you with this important question, why didn’t you do anything about it? Why didn’t you at least bring this up to the board of directors?

Hazem: I think we go back to what I told before, they are the people of Jho Low, and Jho Low basically is the prime minister.

When Shafee asked if he had attempt to clarify if Low was the actual alter ego of the then prime minister Najib, Hazem said he had spoke with 1MDB then chairman Tan Sri Lodin Wok Kamaruddin, 1MDB then director Tan Sri Ismee Ismail and Najib’s then principal private secretary Datuk Azlin Alias. Hazem later said he had done his best to speak to the relevant personnel who have “direct access” to the prime minister.

Hazem claimed that Lodin and the whole 1MDB board already knew that the company was being run by Low.

Asked for what he specifically told Lodin about both Geh and Loo, Hazem said most of their conversations revolved around their “concerns of Jho Low handling 1MDB”.

Hazem said that he had basically told Lodin about 1MDB being in Low’s “hands” and expressed concern over Low running or controlling the company, adding that Lodin had also shared the same concerns.

Asked by Shafee, Hazem confirmed that he had never asked or suggested to Lodin for them to confirm with then PM Najib on what is Low’s role and whether Low controlled 1MDB to the exclusion of Hazem as the CEO.

Shafee: But you agree the way you described Jho Low controlling the senior management, you were virtually not the CEO?

Hazem: Yes.

Shafee: Jho Low was running the company through the management?

Hazem: Yes, in a way.

Hazem confirmed that he did not suggest to Lodin for them to resolve this by checking with then prime minister Najib if this was how the company 1MDB is to operate, and that he did not take any other measures and did not know if Lodin had asked Najib about such issues.

Shafee then suggested that Hazem was making presumptions without evidence that “Jho Low is the prime minister and the prime minister is Jho Low” and that Low’s directions essentially came from Najib, but Hazem pointed to meetings where both Najib and Low were present regarding 1MDB matters.

Hazem specifically cited a November 28, 2013 meeting at Najib’s house at Jalan Langgak Duta attended by 1MDB officials and BSI Singapore representative Yak Yew Chee, where Low was present and had started the meeting by briefing about 1MDB matters such as 1MDB’s US$2.3 billion funds that were purportedly invested overseas under the custody of BSI Bank and what BSI Bank had told 1MDB auditor KPMG about the funds.

When asked how the November 2013 meeting showed that directives from Low to 1MDB management are what Najib has directed, Hazem replied: “This is with regards to 1MDB, why would Jho Low need to be there?”

Hazem later also pointed out that Low was an “external party” and had attending the meeting at the prime minister’s house on 1MDB matters, saying that this was evidence that Low was representing Najib’s interests: “It’s very clear that he (Low) shouldn’t be there at all. He was there and accepted in the meeting.”

Hazem confirmed that he had never asked Najib on what Low’s role was and how he was supposed to react as CEO.

Hazem had previously described Low as Najib’s trusted right-hand man, proxy and special adviser for 1MDB.

Former 1MDB CEO Mohd Hazem Abd Rahman is pictured at the Kuala Lumpur High Court January 6, 2021.  — Picture by Yusof Mat Isa
Former 1MDB CEO Mohd Hazem Abd Rahman is pictured at the Kuala Lumpur High Court January 6, 2021. — Picture by Yusof Mat Isa

About the bonus

Shafee: You said truly you were not a CEO.

Hazem: Yes.

Shafee: You were virtually led by the nose with the greatest respect?

Hazem: Yes.

Hazem agreed with Shafee that he was concerned and ashamed at having being reduced to being impotent as a CEO and that this affected his pride, adding that he had very little control or no control over the matter.

Shafee then repeatedly grilled Hazem about the decision in a 1MDB board meeting on April 22, 2014 — which Hazem had excused himself from — to give him a bonus after the 1MDB remuneration committee assessed his performance as having “exceeded expectations”.

Shafee repeatedly questioned whether Hazem had felt ashamed for receiving a bonus on top of his monthly salary of more than RM90,000 when the company was allegedly going down the drain and when his pride was affected as he was led by the nose as a CEO.

Deputy public prosecutor Akram Ahmad Gharib then said such questions were not relevant to the charges that Najib was facing and that Hazem had already answered that it was a decision made by the 1MDB board.

Shafee explained that he was trying to challenge Hazem’s credibility: “I’m trying to show the inconsistent answers he has provided, namely on one hand he said he felt ashamed, his pride is affected because as a CEO he was completely not CEO, Jho Low was CEO, so he was not doing any work, he was just taking orders virtually, so if your pride is affected, naturally the question is why do you receive so much bonus and how do you feel?”

Hazem later said he was not ashamed to have received his salary and bonus worth a combined RM2.9 million for the entire year of 2014 as he had done his job as required to meet targets set by the 1MDB board.

Hazem disagreed with Shafee’s suggestion that he was purportedly shameless in receiving the salary and bonus as he was part of a purported conspiracy with Low to hoodwink 1MDB.

Datuk Seri Najib Razak arrives at the Court of Appeal in Putrajaya April 20, 2021. — Picture by Yusof Mat Isa
Datuk Seri Najib Razak arrives at the Court of Appeal in Putrajaya April 20, 2021. — Picture by Yusof Mat Isa

Was it a ‘drama’?

Shafee highlighted the November 28, 2013 meeting at Najib’s house and another meeting where Hazem was subsequently recorded as informing KPMG on another day that BSI Bank’s Yak had assured the prime minister that 1MDB’s US$2.3 billion investment was intact.

Hazem said he did not know for a fact at that point that the funds had disappeared, but had suspected that the funds “probably have disappeared”.

Shafee then questioned why Hazem had not asked to speak privately to then prime minister Najib and share his suspicions about 1MDB funds to help save the company and the country, with Hazem then saying he believed Najib already knew the funds were gone.

Hazem: Because as far as I’m concerned, the prime minister knows it, he is part of the scheme.

Shafee: The prime minister knows the money disappeared?

Hazem: From the very beginning I told you, the presence of Jho Low is the prime minister, that was what I was told.

Hazem however agreed he had never confirmed if Low was “truly the PM” and agreed that he was making a presumption that Najib already knew the 1MDB funds were missing.

Shafee: Do you think Datuk Seri Najib, at that meeting, do you think Datuk Seri Najib when he asked for the assurance of the funds, he was being briefed about the funds, all those meetings, are you saying Datuk Seri Najib was pretending to ask all these questions because he knows the money disappeared?

Hazem: I won’t answer on his behalf.

Shafee: I’m asking you, are you saying Datuk Seri Najib when he was being briefed about the funds, it was all a drama by Datuk Seri Najib?

Hazem: Yes.

Hazem later disagreed with Shafee’s suggestion that it was not Najib trying to put on a drama about the 1MDB funds, and disagreed that it was Hazem, Yak and Low trying to put on the alleged drama to impress Najib and 1MDB board members.

Najib’s 1MDB trial before High Court judge Collin Lawrence Sequerah resumes tomorrow morning.