Najib didn’t respond when told of US$700m diversion to then-unknown firm, says ex-1MDB chairman

KUALA LUMPUR, Dec 22 — Datuk Seri Najib Razak did not react to information about a then-unknown firm, now said to be Good Star Ltd, receiving US$700 million from 1MDB’s payment to PetroSaudi International Limited (PSI) for a joint venture, Tan Sri Mohd Bakke Salleh said.

The former 1MDB chairman was the 13th witness testifying against Najib and former 1MDB chief executive officer Arul Kanda Kandasamy in their joint trial for allegedly tampering with the 1MDB audit report.

In the High Court today, Mohd Bakke said the 1MDB board at the time was “flabbergasted” over the diversion of funds as it gave no direction for the management on the matter.

He said the directors had to learn about the transfer from the management team during a board meeting on October 3, 2009.

On the same day, Bakke said, he wrote Najib to apprise the then-prime minister of the development but the latter did not answer.

“I sent him a SMS message on my BlackBerry handphone but never got a reply, which is not the normal action I received before. In the past, whatever message I sent had a response,’’ he said.

Former 1MDB chief executive Arul Kanda Kandasamy is pictured at the Kuala Lumpur High Court December 22, 2021. — Picture by Firdaus Latif

Previously, in the main 1MDB trial, former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi spoke of how money had flowed from 1MDB to Good Star as part of investment efforts involving 1MDB’s purported joint venture partner PS).

Shahrol had previously said 1MDB had pumped in US$1 billion — which it had borrowed — for the joint venture on September 30, 2009 after signing the partnership deal just two days prior with a similar-sounding firm named PetroSaudi Holdings (Cayman) Ltd, but confirmed 1MDB had received “nothing” and not even “a penny” back from this investment.

Instead of putting the US$1 billion into the joint venture company’s bank account, Shahrol said 1MDB had on September 30, 2009 instead followed PSI’s law firm’s instructions to transfer the money in two tranches: US$300 million to the JV firm’s Swiss-based JP Morgan account and US$700 million to PSI's account.

In this trial, Mohd Bakke explained that following the diversion of funds, he had “doubts” over the behaviour of 1MDB’s management team and even asked 1MDB directors to resign during a board meeting on October 3, 2009.

Mohd Bakke had resigned twice as 1MDB chairman, on April 7, 2009, but later he was reappointed but left the post again on October 19, 2009.

In this trial, Najib is charged with abusing his position as prime minister and finance minister to order amendments in February 2016 to the auditor-general’s audit report on 1MDB before its finalisation and presentation to the PAC to avoid any civil or criminal action against him, while Arul Kanda is charged with abetting Najib in the report’s tampering.

* A previous version of this story contained an error which has since been corrected.