This article first appeared in The Edge Malaysia Weekly on September 9, 2019 - September 15, 2019
THE testimony of Datuk Amhari Efendi Nazaruddin, the former special officer to Datuk Seri Najib Razak, at his 1MDB trial was the most explosive so far, with revelations of secret missions to China to get bailout money in return for billion-dollar rail and pipeline contracts. Jho Low is accused of being the puppet master, executing the wishes of Najib with the help of Amhari and others. Our Cover Story explains the significance of Amhari’s witness statement.
It was audacious to allow businessman Low Taek Jho to act as an unofficial executive in the Prime Minister’s Office (PMO), and to be in charge of billions of ringgit in government funds parked under 1Malaysia Development Bhd (1MDB).
Almost as mind-boggling was former prime minister Datuk Seri Najib Razak’s selection of Datuk Amhari Efendi Nazaruddin — a self-proclaimed “junior” officer who claimed to lack knowledge of finance and corporate terms — to negotiate and officiate 1MDB’s key dealings involving billions of ringgit with foreign officials in the United Arab Emirates (UAE) and China.
The High Court was told last week that Najib sent Amhari — a PMO economist — as his sole overseas envoy to resolve 1MDB’s debt woes with the UAE in 2016, although, in secret, he was backed by Low in negotiations with China.
Najib — who purportedly excelled in getting his team to “work in silos” so that they never gleaned the full picture — likely chose Low and Amhari instead of more experienced officials to handle the tricky and complex negotiations because he (Najib) wanted to keep 1MDB’s mounting problems under wraps.
Amhari, who admitted to being overwhelmed by the burden of handling 1MDB’s debts, repeatedly insisted that his understanding of investment banking, corporate finance and corporate restructuring was “very, very limited”.
“I don’t think I am as efficient as people think I am,” he declared, as the defence questioned his quick rise through the ranks in a mere eight years to become one of Najib’s confidants.
The Bank Negara Malaysia scholar- turned-official served in the PMO in 2006 and was a special officer to Najib from 2008 until May 2018 when Barisan Nasional was ousted in the 14th general election.
A bachelor of economics from the University of Warwick, he studied free-trade agreement negotiations under Bank Negara, and then transferred to Khazanah Nasional Bhd as a director in 2016, after asking Najib to appoint him to a government-linked company so he could earn more. He made the request during his secondment to the PMO.
Sent to China to negotiate a bailout for 1MDB
In June 2016, Amhari was sent on a secret mission to Beijing to cut infrastructure deals involving rail and gas pipelines worth tens of billions of ringgit with China. He was to convince the Chinese to bail out 1MDB in exchange for awarding key infrastructure projects to its state-owned enterprises.
Amhari claimed his visit to China’s state-owned Assets Supervision and Administration Commission in 2016 was known only to Low and Najib. Low — who he did not know would be there — attended the meetings and did most of the talking.
“I could not understand some of the things discussed as Jho spoke in Mandarin,” he said. “At times, Jho would interrupt and translate [my points] into Mandarin, [and] at times much longer than what I have said.” Amhari added that he did not receive a full briefing on the negotiation.
Their visit was to pave the way for Najib’s visit to China six months later in November.
One of the bailout deals signed with China included the development of the East Coast Rail Link at a cost of RM65.5 billion — a figure that was more than double the actual cost as it also involves the contractor, China Communications Construction Co Ltd (CCCC) taking over the following 1MDB assets: a piece of land in Ayer Itam, Brazen Sky Ltd and RM6.24 billion worth of units in 1MDB Global Investment Ltd along with the entire stake of 1MDB Energy Holdings Ltd.
CCCC was also to acquire 90% of Loh & Loh Corp for US$244 million and a 70% stake in Putrajaya Perdana Bhd for US$71 million — both companies are linked to Low. China was also awarded two large petroleum and gas pipeline projects in Sabah and in the peninsula worth RM9.41 billion in total.
As at March last year, Najib’s administration had paid RM8.25 billion or 87.7% of the project value of RM9.41 billion, despite an average completion rate of only 13.3%.
Amhari tasked with 1MDB-IPIC settlement talks
From Beijing, Amhari then flew to Abu Dhabi as Najib had also appointed him as his liaison officer in the deal with Abu Dhabi’s sovereign wealth fund Mubadala Development Co on the 1MDB settlement agreement with International Petroleum Investment Co (IPIC). Again, Amhari was a strange choice as he had claimed to be unfamiliar with Mubadala even though the UAE company had invested in the fledging Iskandar Malaysia in 2008.
And, astonishingly, he said he only realised later that their discussion was on the binding term sheet between Mubadala’s unit IPIC and 1MDB.
At the meeting, Amhari said Mubadala CEO Al Khaldoon Al Mubarak had complained that Malaysia “promised the moon and the stars”, but did not fulfil the promise and he wanted a new agreement.
The initial discussion failed to materialise and Amhari said he was pulled out. Low later pulled some strings, according to Amhari, and in April 2017, he was asked to practically rubberstamp the 1MDB-IPIC settlement agreement, which was ostensibly brokered by Low.
Under the settlement agreement, Malaysia agreed to pay IPIC a sum of US$1.2 billion and take over the liabilities for a US$3.5 billion loan co-guaranteed by IPIC, which 1MDB previously maintained had already been paid to IPIC’s entity Aabar Investment PJS Ltd, but which had instead been diverted to a similar sounding company in the British Virgin Islands.
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