KUALA LUMPUR (Aug 16): Former Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz agreed with Tan Sri Muhammad Shafee Abdullah that there is no evidence to show that his client Datuk Seri Najib Razak instructed any officer in Bank Negara Malaysia (BNM) or Deutsche Bank to transfer US$1 billion of 1Malaysia Development Bhd funds to its joint-venture company with PetroSaudi International (PSI).
Zeti agreed that there seemed no evidence to suggest Najib’s involvement.
“It does not appear ... (that Najib gave instructions),” she said, adding that she was not in a position to know if such a directive or instruction was given by the former prime minister verbally.
During cross-examination, Shafee asked whether in present times, it appeared to Zeti that there was any evidence that Najib gave such instructions.
Shafee: There are no documents that suggest that there was an oral or written application (by Najib) to remit the amount of money to the two bank accounts?
Zeti: Yes, correct.
It was the fourth day on the stand for Zeti — the 46th prosecution witness in the trial — where Najib faces four charges of abuse of power and 21 counts of money-laundering of funds belonging to 1MDB. The PM and finance minister at the time, Najib also held the position of chairman of the board of advisers of 1MDB.
Zeti was responding on the questionable US$1 billion transfer by 1MDB in Sept 29, 2009. Months earlier, 1MDB had raised some RM5 billion in Islamic Medium Term Notes (IMTN) and invested the funds in a PetroSaudi joint venture where it acquired a 40% stake.
Of the US$1 billion, a sum of US$700 million made its way into Good Star Ltd while the balance of US$300 million went into the JV, 1MDB PetroSaudi Cayman.
Good Star, controlled by fugitive tycoon Low Taek Jho or Jho Low, was not related to PSI.
Throughout proceedings this week, Shafee has questioned why the blame for the misdirection of funds has been pinned on Najib, rather than on 1MDB executives.
On Tuesday (Aug 15), Zeti also revealed that BNM had recommended to then attorney general Tan Sri Mohamed Apandi Ali that three 1MDB senior executives be charged for the misdeed.
She had named former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi, former executive director Casey Tang Keng Chee and Nik Faisal Ariff Kamil.
However, Apandi decided not to charge any of them, and in Jan 2016, absolved Najib of any wrong-doing and halted investigations into 1MDB. It was only in 2018, after the 14th general election that the former prime minister was charged.
Zeti cannot confirm that none of US$700 million went to Najib
In the afternoon, Zeti agreed that the former prime minister opened his AmBank account two years’ after the US$1 billion transfer of the PSI joint venture company (JVCo).
“Yes, Najib opened the AmBank account on Jan 13, 2011,” she said.
Shafee: Would you agree that none of the US$700 million went to Najib?
Zeti: I cannot confirm that.
Zeti was then asked by Shafee whether, in her opinion, Najib was involved with 1MDB’s Murabaha arrangement with PSI in 2010, where the fund had invested a further US$1.5 billion as it was supposed to have a 40% stake in the PSI JVCo, 1MDB-PetroSaudi.
To recap, in order to hide the failure of the joint venture and misrepresent the value of 1MDB’s investment overseas, as well as to circumvent audit concerns at that time to the fund and its investments, 1MDB issued a Special Rights Redeemable Preference Shareholders Resolution to restructure the equity investment in the joint venture to a convertible fixed income generating debt instrument in the form of Murabaha notes.
A Murabaha Financing Agreement (MFA) was made between JVCo 1MDB PetroSaudi and 1MDB in June 2010 but backdated to March 22, 2010, to avoid audit concerns.
Under the MFA agreement, 1MDB was required to pump another US$1.5 billion into the 1MDB-PetroSaudi JVCo to finance the obligations of the MFA and 1MDB, caused by the fraudulent transfer of US$500 million from 1MDB to the JVCo account.
The trial before Court of Appeal judge Datuk Collin Lawrence Sequerah continues on Thursday.
Najib is charged with four counts of abuse of power as former prime minister and finance minister to receive gratification of RM2.28 billion and 21 counts of money laundering amounting over RM4.3 billion.
Presently, Najib is serving his 12-year jail sentence.
The Edge is covering the trial live here.
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