Ex-1MDB chairman: In phone call, Najib spoke of urgency to approve new US$1b deal being studied by board

KUALA LUMPUR, April 1 — Former prime minister Datuk Seri Najib Razak had in September 2009 told the 1Malaysia Development Board (1MDB) board of directors to approve a new joint venture that would eventually see the company pump in US$1 billion (RM4.2 billion), and wanted it to be signed within four days’ time, the High Court heard today.

Tan Sri Mohd Bakke Salleh, who was the chairman at that time, said the company’s directors were rushed into making the decision due to the phone call from Najib.

Bakke was testifying as the 13th prosecution witness in the trial of both Najib and former 1MDB CEO Arul Kanda Kandasamy over the alleged tampering of the auditor-general’s 1MDB audit report.

One of the key bits of information removed from the 1MDB audit report before it was presented to the parliamentary watchdog Public Accounts Committee (PAC) was the mention of now-fugitive Low Taek Jho’s presence in that September 26, 2009 board meeting.

Bakke today reaffirmed that Low was present in the meeting room even before the 1MDB board meeting on September 26, 2009 started.

At the time of the meeting, Najib was prime minister, finance minister and chairman of 1MDB’s board of advisers. By that time, the Terengganu government-owned Terengganu Investment Authority (TIA) had also been renamed 1MDB and came under the Finance Ministry’s ownership.

Just before the 1MDB board meeting could start on that day, Low used his own handphone to call Najib and then passed the phone to Bakke.

Having only been briefed at the previous board meeting on September 18, 2009 about the proposed joint venture deal purportedly with PetroSaudi International Limited, Bakke said the 1MDB board had asked 1MDB management to get more details and carry out due diligence to be presented to the board at the September 26, 2009 meeting.

Bakke said, however, that these details and numbers as well as due diligence were not made available to the 1MDB board on September 26, while Najib had in a phone call pushed for the board to approve the deal.

Bakke explained that 1MDB’s board of directors was at that point unhappy with the company’s predecessor TIA’s fund-raising exercise which involved issuing of RM5 billion bonds via Islamic term medium notes that resulted in the company only receiving RM4.3 billion with RM700 million lost, and with 1MDB at that time still having to pay interest on the bond amounting to RM288 million which was less than the interest the company would gain from placing RM4.3 billion in fixed deposits in the bank.

But he said Najib too had asked the 1MDB board not to dwell on that RM5 billion bond matter, despite the members’ unhappiness over it.

“So we were not happy and we were trying to find out more and when the former prime minister spoke to me ‘don’t spend time looking at the past transaction, I want you guys to focus on the proposal of PetroSaudi joint venture because this thing has been discussed for quite some time. We need to firm up a decision as soon as possible because I would like to witness this together with Prince Turki of Saudi Arabia, and we are planning to sign this at the end of the month’,” Bakke said today.

Noting that the phone call was on September 26 and that “end of the month” would then mean September 30, Bakke said: “So coming from the PM expressing urgency and telling us ‘don’t worry’, this is another comforting statement from PM, ‘this is a government to government transaction, it is to enhance bilateral relationship’.

“So all these comforting words to me which I then shared with fellow board members… told them, look this is what the PM asked to do or to look into,” he said.

Bakke said the 1MDB board then discussed the joint venture proposal and approved it, while attaching four conditions that were however not fulfilled by the 1MDB management when the latter proceeded to sign the agreement for the joint venture. 

Bakke said the 1MDB management had also remitted the funds differently from what was instructed and that was why he later left the 1MDB board.

(Previously in a separate trial against Najib involving the alleged misappropriation of more than RM2 billion of 1MDB funds, former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi had however said there was no official signing ceremony for 1MDB’s joint venture with the similar-sounding firm named PetroSaudi Holdings (Cayman) Ltd and that he had signed it on September 28, 2009 in his office.)

Specifically on this joint venture deal that 1MDB eventually ended up signing, Bakke today said there seemed to be a “rush factor” in establishing the joint venture company between 1MDB and PetroSaudi. 

“But the crunch, the one that really made the board sit down and deliberate and work out its position, its way forward, was the phone call from the PM,” he said.

He stressed that it was this phone conversation with then prime minister Najib that reinforced  that this joint venture proposal had to be “looked at as a matter of urgency and seriously”, and  that this was an instruction from Najib.

Bakke agreed with Shafee’s suggestion that it was possible for Low to mislead then prime minister Najib.

In the minutes of the September 26, 2009 meeting that he signed off on, the front page contained a list of attendees including Low Taek Jho. — Picture via Facebook

Jho Low came like a ghost

Asked about why the minutes of the 1MDB board meeting on September 26, 2009 did not record what Najib had told Bakke, Bakke explained: “The conversation with fellow directors on what transpired from my phone conversation with the prime minister was shared before we started the board meeting. It was before we officially started the board meeting.”

Bakke also said he had initialled every page of the minutes of the 1MDB board meeting on September 26 and October 3, 2009 before signing off on the last page, as he considered these to be very important meetings and as he was feeling “discomfort or apprehension” about the proposal on the PetroSaudi joint venture.

In the minutes of the September 26, 2009 meeting that he signed off on, the front page contained a list of attendees including Low.

“When the minutes were shown to me, for confirmation and distribution to the board for the meeting on September 26, 2009, I made it very clear that I would initial every page and sign the last page and got the company secretary to do it. Just to confirm the minutes given to the board members had Jho Low as an attendee,” Bakke said.

Previously, the auditor-general’s 1MDB audit report had included the findings that the National Audit Department (NAD) had on April 15, 2015 found at 1MDB’s office that Low’s name was recorded as an attendee of the September 26, 2009 meeting and that Bakke had on June 19, 2015 also told the NAD that the minutes of meeting showed Low’s attendance.

The 1MDB audit report also said however that 1MDB had on June 19, 2015 provided a different version of the minutes of the meeting where Low was not recorded as an attendee.  

Following the alleged tampering of the 1MDB audit report before it could be given to the PAC, mention of this discrepancy over Low’s attendance was removed.

Today, Shafee remarked on how Low was not mentioned in 1MDB’s different version of the minutes when his attendance should have been recorded, saying “this guy came macam hantu (like a ghost) you know, a phantom, came but not registered”. Bakke then replied it was like a magic trick, saying “main silap mata lah.”

Previously in August 2021, 1MDB’s former investments director Kelvin Tan Kay Jin had as the eighth prosecution witness confirmed that he was the one who recorded and prepared the minutes of the September 26, 2009 meeting, and also confirmed that Low was in attendance at that meeting.

The trial before High Court judge Mohamed Zaini Mazlan is scheduled to resume on April 12.