This article first appeared in The Edge Financial Daily on December 4, 2019 - December 10, 2019

KUALA LUMPUR: Former prime minister Datuk Seri Najib Razak yesterday told the High Court that fugitive businessman Low Taek Jho (Jho Low) was a close acquaintance (kenalan rapat) of the Sultan of Terengganu Sultan Mizan Zainal Abidin and his sister Tengku Datuk Rahimah Sultan Mahmud.

Najib said he understood the Terengganu Investment Authority (TIA) concept was a result of discussions among Jho Low, Sultan Mizan and the Terengganu state government.

“I understand that Jho Low was chosen as the adviser to the chairman of TIA’s board of advisers, who was Sultan Mizan himself,” he said.

Najib’s lead defence counsel Tan Sri Muhammad Shafee Abdullah also asked the lawmaker for Pekan to explain the formation of 1Malaysia Development Bhd (1MDB), which owned SRC International Sdn Bhd when the alleged misappropriation of RM42 million of SRC funds took place.

Najib said Menteri Besar Terengganu Inc and Sultan Mizan, then Yang di-Pertuan Agong (YDPA), decided to form the sovereign wealth fund with a capital of RM11 billion.

The capital, according to Najib, was to be funded via RM6 billion from oil royalty debts to Terengganu and RM5 billion from issuing Islamic medium-term notes (IMTN), proposed to be guaranteed by the federal government.

“At that time, I was invited, in my capacity as finance minister, to facilitate the issuance of IMTN,” he said.

“Eventually, the Terengganu state government and Menteri Besar Terengganu Inc did not agree with the terms of the IMTN despite they have been issued. As a result, on Aug 8, 2009, the cabinet approved the federal government to take over TIA.

“This was a decision reluctantly made to protect the [Terengganu] state government and YDPA from embarrassment and to avoid negative impact on the Malaysian bond market globally,” he explained.

On whether Jho Low was given a role after TIA became 1MDB, Najib said as the Penang-born businessman was Sultan Mizan’s adviser, and had shown himself as an influential person in the Middle East, he was retained at 1MDB.

“Hence, I believe that he (Jho Low) is capable and able to facilitate investments and partnerships from there.

“These [Middle East] countries have excess cash due to a rise in oil prices. Hence, I think Jho Low’s influence and networking that he possesses would help achieve 1MDB’s objectives in getting the desired investments,” Najib said.