KUALA LUMPUR (Sept 21): Former prime minister Datuk Seri Najib Razak received RM4.09 million (£750,000) originating from 1Malaysia Development Bhd (1MDB) funds, which was meant to purchase options that were part of a consideration by International Petroleum International Co (IPIC) for the notes that raised US$3.5 billion in 2012 for a joint-venture exercise.

Testifying as the prosecution’s 47th witness in the 1MDB-Tanore trial, where Najib is the only accused, Bank Negara Malaysia (BNM) analyst Adam Ariff Mohd Roslan had testified about how this sum ended up in Najib’s account.

The money trail involved two loans amounting to US$1.225 billion taken by 1MDB's wholly owned subsidiary 1MDB Energy Holdings Ltd (1MEHL) for the aforementioned options purchase.

On Wednesday, Adam testified that 1MEHL made a utilisation request to Deutsche Bank AG's Hong Kong branch in respect of the US$250 million facility agreement dated May 26, 2014, to draw down the entire amount on May 28, 2014, and instructed for the proceeds of the loan to be credited into 1MEHL’s account with Falcon Bank.

According to 1MEHL’s bank statement and records, a sum of US$239,939,970 was credited on May 28, 2014. The witness added that the account had a negative balance of about US$227 million before this transfer.

On the same day, 1MEHL instructed Falcon Bank to transfer US$175 million to Aabar BVI’s account held with BSI SA. Falcon Bank's records confirmed the outgoing transaction from 1MEHL’s account.

Previously, it was revealed that master conspirator Low Taek Jho or Jho Low had incorporated Aabar BVI — Aabar Investments PJS Ltd — in the British Virgin Islands to mirror the subsidiary of IPIC. The real subsidiary of IPIC is Aabar Investments PJS, without the "Ltd".

The witness further testified that on June 10, 2014, Aabar BVI instructed BSI SA to transfer US$19 million to a company called "Affinity Equity International Partners Ltd". The bank executed the transfer on June 17, 2014.

Affinity Equity was a company controlled by Eric Tan Kim Loong, a close associate of fugitive financier Jho Low.

From there, on or about June 18, 2014, Affinity Equity's bank statement also recorded an internal transfer withdrawal of US$1.89 million. The money was transferred to Blackrock Commodities (Global) Ltd.

"Based on examination of Blackrock’s bank statement for its account number, Blackrock’s account recorded a corresponding deposit of US$1.89 million on the same day with the same transaction reference number," he said. The transfer took place on June 19, 2014.

Blackrock was also owned by Tan, as documents verified by Adam showed that Affinity Equity and Blackrock shared the same mailing address in Singapore, registered address in the British Virgin Islands, and contact number.

He then testified that on the same day, Blackrock received US$1.89 million from Affinity Equity. Blackrock transferred £750,000 to Najib's account (ending 880, AmPrivate Banking-1MY).

The witness added that Najib's bank account statements and records showed that RM4,093,500 (£750,000) was credited into the account on June 23, 2014.

Before the receipt of this sum, the last balance in Najib's account was RM100,000.

In former Goldman Sachs banker Roger Ng Chong Hwa’s criminal trial for misappropriation of funds belonging to 1MDB last year, a star witness testified that Blackrock had used almost US$30 million of US$3 billion raised from a third bond issuance in 2013 for the purchase of high-end jewellery for Najib’s wife, Datin Seri Rosmah Mansor.

Federal Bureau of Investigation (FBI) agent Eric Van Dorn’s testimony showed that transfers were made by Blackrock, which followed on the heels of 1MDB’s third and last bond issuance, code-named Project Catalyze, as mentioned above.

Three transfers totalling US$32 million were highlighted by the FBI forensic accountant for jewellery, and US$1.6 million for luxury handbags.

There were two separate transfers of funds to Rose Trading and famous jewellery designer Lorraine Schwartz in September 2013 for jewellery purchases.

He said that US$27.3 million was transferred to Schwartz on Sept 10, 2013, and US$2.81 million was transferred to Rose Trading. The FBI agent said that the payments made were for “high-end jewellery” for Rosmah.

As for the luxury handbags, the transfers were arranged by Tan to Samilor Handbag (Samilor Enterprises, Inc) based in Long Island, New York.

Payments were made in October (US$665,000) and November 2013 (US$980,000), amounting to US$1.645 million.

Reading out from a December 2013 invoice that Tan had emailed, Van Dorn confirmed that the price of the bags purchased by Blackrock ranged from US$25,000 to US$130,000.

The Edge is covering the trial live here.

Users of The Edge Markets app may tap here to access the live report.

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