'We’ve already pushed the button': How 1MDB’s predecessor TIA continued RM5b fundraising despite Terengganu Sultan's request to defer

KUALA LUMPUR, Nov 17 — The Terengganu ruler Sultan Mizan Zainal Abidin had wanted Terengganu Investment Authority (TIA) — the predecessor of 1Malaysia Development Berhad (1MDB) — to defer the taking on of debts of RM5 billion, but then prime minister Datuk Seri Najib Razak had appeared keen to have the fundraising exercise proceed, the High Court heard today.

Tan Sri Ismee Ismail, who was both a director in TIA and in 1MDB, spoke of plans for TIA to raise RM5 billion by issuing bonds through Islamic Medium Term Notes (IMTN) with the aim of raising funds to develop Pulau Bidong in Terengganu and to carry out a joint venture with Mubadala in Abu Dhabi.

Efforts and steps had been taken by TIA since March 2009 for the RM5 billion bond issuance.

Ismee said that on May 22, 2009, he was summoned to Istana Terengganu to meet with the Terengganu Sultan, and that TIA’s CEO Datuk Shahrol Azral Ibrahim Halmi and TIA director Tengku Rahimah Almarhum Sultan Mahmud — the Terengganu Sultan’s sister — were also present at the same meeting held in the afternoon.

Ismee said the Terengganu Sultan had in that meeting said “My interest and my concern is the wellbeing of my state and my people” and said he wanted the IMTN to be postponed.

Ismee said he had then replied “Your concern is my concern too”, further telling the court today: “In my view, this was initiated on Tuanku’s wishes and if Tuanku himself wishes to postpone it, it does not have to be questioned.”

Ismee said he and Shahrol had then signed a TIA directors’ circular resolution, which was also signed by the Terengganu Sultan before the ruler left with the signed resolution.

In the TIA directors’ circular resolution dated May 22, 2009, the directors agreed to suspend the RM5 billion fundraising via IMTN and to halt the IMTN programme, and to order Shahrol to notify TIA’s advisers of the IMTN’s suspension, and to suspend the power given to Shahrol or any director to do anything in relation to the issuance of the IMTN.

Ismee said confirmed there was a signature under Tengku Rahimah’s name, but said he was unable to confirm if it was her signature as it was already there when he signed the document.

In the TIA directors’ circular resolution dated May 22, 2009, the directors agreed to suspend the RM5 billion fundraising via IMTN and to halt the IMTN programme, and to order Shahrol (pic) to notify TIA’s advisers of the IMTN’s suspension, and to suspend the power given to Shahrol or any director to do anything in relation to the issuance of the IMTN. ― Picture by Ahmad Zamzahuri

‘We have pushed the button’

Ismee said Shahrol had not said anything during the meeting with the Terengganu Sultan regarding the postponement of the RM5 billion fundraising.

Ismee said that it was while they were on the way to the car park that Shahrol told him that the IMTN could not be postponed as instructions had already been given to the bond’s lead arranger AmBank.

“Datuk Shahrol told me, ‘we have already pushed the button’,” Ismee said.

Ismee said he then told Shahrol to resolve the matter, adding that he had asked why Shahrol did not raise this earlier during the meeting or inform Ismee to enable him to explain to the Terengganu Sultan.

Ismee noted that Shahrol had said he was not used to dealing with such situations, with Ismee saying that he did not contact anyone to seek advice and had then left it to Shahrol to resolve.

Ismee was testifying as the 13th prosecution witness in Datuk Seri Najib Razak's trial involving 25 charges in relation to more than RM2 billion of funds allegedly misappropriated from 1MDB. — Picture by Ahmad Zamzahuri

Najib asks why

Ismee said Shahrol later contacted him for a meeting with Najib at the latter’s house at Jalan Langgak Duta, adding that he had around 8pm to 8.30pm arrived at Najib’s house where he saw Shahrol already waiting alone in the living room.

After Najib came down several minutes later, Ismee said he had briefly explained what had transpired at the meeting with the Terengganu Sultan earlier that day.

“Datuk Seri Najib’s first response at that moment was ‘why did you sign it?’ and Datuk Seri Najib also questioned why we did not request to Tuanku to give us time to think.

“What I could say to Datuk Seri Najib is this is a decree from Tuanku so what can we do. I consider that from Datuk Seri Najib’s reaction and intonation that he wanted the issuance of the IMTN bonds to be continued,” Ismee said.

“At that time, I considered it to be already a problem outside of my jurisdiction. I had met with Tuanku to carry out what Tuanku wanted and I had also met with the prime minister. Therefore I left it to them to resolve,” he added.

Ismee was testifying as the 13th prosecution witness in Najib’s trial involving 25 charges in relation to more than RM2 billion of funds allegedly misappropriated from 1MDB.

Previously, Shahrol as the ninth prosecution witness had in speaking of the RM5 billion fundraising exercise said the Terengganu Sultan was angry during the meeting and had commented about an “unsavoury character”, but said he did not know who the term “unsavoury character” was referring to.

Shahrol had also said Najib had on May 22, 2009 asked for an explanation of what transpired earlier that day at the Istana Terengganu in Kuala Lumpur, noting that Najib had asked him to “go ahead” and proceed with the RM5 billion fund-raising.

Najib’s ongoing 1MDB 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.

The trial before High Court judge Datuk Collin Lawrence Sequerah resumes this afternoon, where Ismee is expected to continue testifying.