This article first appeared in The Edge Malaysia Weekly on May 23, 2022 - May 29, 2022
HAVING done his utmost to keep the involvement of former prime minister Datuk Seri Najib Razak and fugitive financier Low Taek Jho (Jho Low) out of the public domain during the looting of billions of dollars from 1Malaysia Development Bhd (1MDB), its former chairman Tan Sri Mohd Bakke Salleh acknowledged last week that he ought to have been bolder in speaking up, even if it meant complaining about Najib and challenging the many dubious deals and transactions which he suspected were tainted with illegality.
Bakke only held the post for seven weeks in 2009, and by the time he was called to testify before parliament’s Public Accounts Committee’s (PAC) hearing into the financial troubles at the state-owned strategic investment company seven years later, he decided he would not “mince his words”, even though there were attempts to coach him on what to say.
He told the High Court last week that about two weeks before his PAC testimony, he received a telephone call from Najib to meet with then PAC chairman Datuk Seri Hasan Arifin. Bakke attended two meetings hosted by Datuk Seri Ahmad Farid Ridzuan, who at the time was in charge of “image branding” for Najib.
Re-examined by lead prosecutor Datuk Seri Gopal Sri Ram on the meetings, Bakke said the discussions involved things to be said and topics to be avoided in his testimony. “[Things should be said are all these] irregularities and shenanigans happen because of management oversight and non-compliance with good corporate governance. This is the way we should respond to questions of PAC members and avoid making reference to [Jho] Low and the [then] PM,” said Bakke, who was dismissed from the witness stand last week.
The prosecution’s 15th witness in the 1MDB-Tanore trial, he was asked why he did not lodge a formal complaint with the Ministry of Finance (MoF) or Najib over the financial irregularities that led to his resignation from the board in 2009, sparking whispers that all was not smooth sailing at 1MDB.
“The thing that discouraged me [was] it is really complaining against the [then] prime minister,” he said under re-examination, which prompted Sri Ram to quip, “Like complaining about the loss of sheep to the wolf?”
Minister of Finance Inc wholly owned 1MDB and Najib, as the finance minister, was its representative shareholder.
“Early [in my] involvement as board member, I was already uncomfortable. I already had this feeling, especially [when we] found out that management had split the remittance, that was the trigger. I felt very uncomfortable with the whole thing and [it] prompted me to resign. In fact, I wanted to resign on the spot.
“To go back to [the] PM and tell him I had my suspicions [of you], I was not comfortable. But I suppose looking at its entirety, maybe I should have done that and been bold enough to say whether PM or not, I’m prepared to stick out my neck. But it was not done.”
The trigger that the 68-year-old referred to was 1MDB’s joint venture (JV) with Saudi Arabia-based PetroSaudi International Ltd (PSI), under which 1MDB undertook an equity investment of US$1 billion while PSI injected US$1.5 billion worth of assets into the JV. However, after the JV agreement was signed, PSI said its US$1.5 billion asset injection into the JV company entailed a US$700 million advance for 1MDB, which meant 1MDB owed PSI.
Through the instructions of former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi, 1MDB had diverted US$700 million from the US$1 billion JV equity investment into an account belonging to Good Star Ltd, on the grounds that Good Star was PSI’s affiliate. In truth, Good Star was linked to Jho Low.
Bakke said the time constraints to approve the JV, coupled with the management’s blatant disregard of the board’s advice and the split-remittance combined to prompt his resignation on Oct 19, 2009, only a few weeks after his reappointment on Aug 11.
Bakke said he instructed his secretary to personally send his resignation letter directly to the Prime Minister’s Office in Putrajaya. Prior to that, he sent an SMS to Najib detailing the mismanagement, only to be met with silence.
‘Not solely my responsibility’
Earlier, during cross examination by Najib’s counsel, Tan Sri Muhammad Shafee Abdullah, Bakke agreed that he should have lodged a formal complaint with MoF and the then PM over the irregularities.
Shafee: You could have expressed all your frustrations and findings of facts. Send this complaint not just to MoF Inc but officially given to the [then] PM because you are resigning. I’m putting it to you that you could have put it on record, ‘This is what I wasn’t happy about’, but you chose not to do it.
“Yes, could have done that,” Bakke replied, but stopped short of taking responsibility, saying that other board members could have provided oversight as well.
“If you had done that, these issues that culminated in this case may not have gone this far, correct?” Shafee asked.
Bakke replied in the negative, adding “There was also the new board chairman to attend to this. The responsibility cannot be mine alone … [you] stretch the argument to infer if I had done [these] things, the mess may not have happened [but] I disagree.”
Suspicions aside, consensus to keep Najib’s name out of the public domain
Throughout the three days of cross-examination, Bakke, who is now Petroliam Nasional Bhd chairman, repeated his suspicions that Najib had a role in what transpired with the PSI JV.
He also repeated that once he left 1MDB, he wanted to put the experiences behind him. However, he did attend the official signing ceremony for the JV at the 1MDB office, which took place in November 2009, as a sign of respect to Najib and the board members. The co-founder of PSI, Prince Turki Abdullah, was among the invited guests.
Interestingly, Bakke said he was shadowed at the event by a 1MDB employee, who followed his every move, even to the washroom.
Previously, Bakke testified that the board had given “conditonal approval” for the proposal to enter into the JV with PSI before full due diligence was completed only because of a phone conversation that Bakke had with Najib just as a board meeting was to commence on Sept 26, 2009. The conversation, which Najib had initiated, had accelerated the JV as the former premier instructed the board to firm up the deal quickly. Just two days later, on Sept 28, Shahrol signed the JV agreement.
The board, however, agreed to keep Najib’s name out of the public domain, so the conversation was not documented in the minutes of the meeting.
When asked by Sri Ram who did this omission “insulate”, Bakke said it was Najib as there was a consensus to “not mention anything linked to the PM”.
Najib is charged with four counts of abuse of power in enriching himself with RM2.3 billion of 1MDB funds and 21 counts of money laundering of the same amount. He could face a fine and up to 20 years’ imprisonment if convicted.
The trial resumes before High Court judge Datuk Collin Lawrence Sequerah on June 7.
Summer holidays aboard luxury yachts
by Hafiz Yatim
In August 2009, about four months after Datuk Seri Najib Razak became the country’s sixth prime minister, he and his family went on a luxury yacht trip on the RM Elegance, on the invitation of a Kuwaiti prince.
While on the boat, according to his former aide Datuk Wan Ahmad Shihab Wan Ismail, Najib had sought to go to another yacht owned by Saudi Prince Turki Abdullah where they also met with Tarek Obaid.
Prince Turki Abdullah was a co-founder of PetroSaudi International Ltd (PSI) with Tarek — a pivotal player in persuading 1Malaysia Development Bhd (1MDB) to go into a joint venture (JV) with PSI, in a partnership to look for potential energy deals in Turkmenistan that were non-existent, and which resulted in billions of ringgit in losses to 1MDB.
The JV agreement was signed on Sept 28, 2009. Earlier, 1MDB had raised RM5 billion via Islamic Medium Term Notes (IMTN) and wanted to invest the funds in the 40:60 JV deal with PSI.
A fortnight ago, Wan Ahmad testified to a number of yachting holidays that Najib and his family had with Arab royalty, providing a glimpse into their lifestyles, but also hints as to how 1MDB may have been pushed into some of the deals with the Arabs.
The prosecution’s 16th witness in the 1MDB-Tanore trial, Wan Ahmad also testified that fugitive businessman Low Taek Jho, aka Jho Low, helped to arrange, plan and finalise the trips.
Wan Ahmad detailed three yacht trips, two between 2009 and 2013, where Najib went along with his family members — his wife Datin Seri Rosmah Mansor and the couple’s two children Nooryana Najwa and Nor Ashman, and Najib’s stepson Riza Aziz.
In May 2012, 1MDB raised US$1.75 billion in bonds via Goldman Sachs to buy Tanjong Energy’s energy assets, and five months later raised another tranche of equal amount to purchase energy assets belonging to Genting group. Both bond tranches, amounting to a staggering US$3.5 billion, were guaranteed by Abu Dhabi-based International Petroleum Investment Corp (IPIC).
In July 2013, fresh from winning the 13th general election, Najib and his family went on another yacht trip off France aboard the Topaz, a luxury yacht owned by Sheikh Mansour Zayed Al Nahyan, a United Arab Emirates prince, who also owned the Manchester City football club.
According to the US Department of Justice, US$140 million of 1MDB funds were alleged to have been used to acquire the Topaz, which was the seventh largest super yacht in the world in 2020.
During the Roger Ng Chong Hwa trial in the US, a Federal Bureau of Investigation officer revealed that Jho Low and his cohorts at Goldman Sachs had bribed senior government officials in Malaysia and Abu Dhabi, as well as 1MDB executives, to ensure Goldman had the mandate to undertake 1MDB’s two bond tranches and to facilitate the looting of the strategic investment company.
For instance, Najib received US$756 million and Tarek US$340 million.
Wan Ahmad also testified to another trip, sometime in July or August 2010, where Najib and his entourage boarded a yacht called Golden Odyssey, owned by another Saudi prince, for their vacation trip to Greece and Rome.
On all three trips, Wan Ahmad said that Najib and his entourage of about 17 to 20 people included household staff and an accompanying officer.
Businessman Tan Sri Bustari Yusof, who is Works Minister Datuk Seri Fadillah Yusof’s brother, accompanied the Najib family on all three trips, he said.
Wan Ahmad also told the court during re-examination that Najib did not contradict trip instructions given by Jho Low, which the entourage took on government-owned chartered jets.
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