KUALA LUMPUR, Dec 8 — Lawyer Tan Sri Muhammad Shafee Abdullah today sought to distance his client Datuk Seri Najib Razak from the idea behind the formation of 1Malaysia Development Berhad's (1MDB) predecessor Terengganu Investment Authority (TIA) Berhad, as well as the decision for TIA to borrow RM5 billion by issuing Islamic bonds in May 2009.
Shafee sought to portray TIA and its RM5 billion debt as being an idea inspired by other individuals such as Low Taek Jho instead.
Shafee pushed his arguments during Najib's trial over the misappropriation of RM2.28 billion of 1MDB funds that were alleged to have entered Najib's personal AmBank bank accounts.
While cross-examining former AmBank banker Joanna Yu, who was handling Najib's bank accounts, Shafee referred to a declassified excerpt of a confidential December 12, 2008 minutes of the Cabinet's meeting, to suggest the TIA was actually inspired by the Terengganu Sultan instead of being Najib's idea.
At that time, Tun Abdullah Ahmad Badawi was prime minister, while Najib was deputy prime minister while also holding the finance minister's post.
"So it says Cabinet, so they took note of what the PM said, this idea — according to the PM and this one I must read to you — 'bahawa cadangan penubuhan TIA telah diilhamkan oleh Seri Paduka Baginda YDPA' (that the proposal for TIA's formation was inspired by Seri Paduka Baginda) where the main objective is to ensure Terengganu's economic sustainability in the long term," Shafee said.
Shafee then argued that this showed that the idea of TIA was brought about by the Yang di-Pertuan Agong himself (who was at that time the Terengganu sultan), but Yu resisted this idea by noting that the Cabinet paper also refers to taking note of the views by the then deputy prime minister — who was Najib.
Shafee then suggested that Low had told AmBank that the Agong was going to establish TIA and the federal government was supporting TIA's issuance of a bond, with Yu only agreeing that Low had spoke of plans for the setting up of a sovereign wealth fund and proposed plans to raise RM10 billion.
Later, Shafee again cited the Cabinet paper when he suggested that the TIA "idea came from the YDPA, communicated it to the PM, not Datuk Seri Najib but the PM then, who agreed with the idea".
But Yu again read the Cabinet paper aloud, saying: "Baginda had also discussed the proposal of setting up TIA with YAB deputy prime minister."
Shafee then said he was not saying that the Agong had made a decision, and said he was only arguing that TIA was inspired by the Agong and communicated to the prime minister, adding that the Agong was recorded as having told the PM that he had discussed the TIA proposal with then DPM Najib who was also the finance minister.
Shafee again tried to suggest that TIA was not Najib's idea but the idea of Terengganu and the Terengganu ruler Sultan Mizan Zainal Abidin who happened to be the Agong then, but Yu resisted this by suggesting she would not know.
"I won't be able to say who mooted the idea, at most, but based on this Cabinet meeting, it just says the Agong made a statement to PM and there is also mention of a discussion he had with the finance minister. If you are asking who mooted, I, I," she said, before being cut off by Shafee.
High Court judge Datuk Collin Lawrence Sequerah then noted that Yu was saying she does not know for a fact, and suggested that Shafee could raise this up in his arguments at the submissions stage.
Shafee then suggested that the Cabinet paper showed Najib was not the one who had come up with the idea for the federal government to guarantee the RM5 billion bond issued by TIA, with Yu then noting that the Cabinet paper did mention the prime minister saying it should be guaranteed.
After being told by Low and Casey Tang that the federal government would be guaranteeing all RM5 billion to be taken on by TIA as debt by bond issuance, Yu said AmBank decided it could work on the deal, noting that this was because investors could go to the government if there is a default as the bond would have a government guarantee.
Shafee later suggested that Low had claimed the RM5 bond issuance by TIA as his idea, but Yu could not remember having heard of this.
Shafee: Are you aware, maybe Jho Low, and I'm almost certain Jho Low would have told you this, at least told the bank, that this idea of bond issuance was his idea which was agreed by the YDPA?
Yu: I'm not sure whether he told the bank that, but I don't recall him mentioning it was his idea.
Earlier when asked how Low was connected to TIA, Yu said Low had mentioned himself to be the adviser to the board of advisers for TIA.
Asked if Low had told her he was the adviser to the Terengganu sultan who was the Agong then, Yu said: "I don't remember him saying that explicitly." She disagreed having any impression that Low was also adviser to the Agong.
Shafee showed Yu an email dated April 1, 2009, where Low corrected his designation as being a special adviser to the chairman of TIA's board of advisers, instead of as a special adviser to TIA's chairman.
Shafee suggested that Agong was actually the chairman of TIA's board of advisers, but Yu said she was uncertain if this information was already provided to AmBank at that time.
Yu highlighted she was only copied or included in the list of recipients for the email and said she did not have the full list of TIA's board of advisers.
"I don't recall Jho Low saying I'm the advisor to the Sultan," she said.
Yu agreed she is now aware that Low is actually a crook.
Shafee: So now you know he is a crook, it is unlikely he did not represent to you that he is a special adviser to YDPA, it is unlikely, out of character.
Yu: I can't remember if he specifically said it at that time — adviser to the Agong.
Shafee then said he will leave this point for the submissions stage.
Najib's 1MDB trial resumes next Monday, where Shafee is expected to further cross-examine Yu.
