KUALA LUMPUR (Nov 7): The defence in the 1Malaysia Development Bhd-Tanore (1MDB-Tanore) trial has contended that the monies in former prime minister Datuk Seri Najib Razak's account were not used on lavish purchases for himself but rather for political and welfare purposes.

Lead defence counsel Tan Sri Muhammad Shafee Abdullah said this during his cross examination of the investigating officer (IO), ACP Foo Wei Min, at the High Court on Tuesday.

Muhammad Shafee: You agree [Najib] spent a lot on political and welfare purposes. Generally speaking, if you look at what [Najib] spent on, he paid for Umno Batu Kawan Penang, he paid for Umno here and there. [The] various expenses he made, they are either for corporate social responsibility, welfare or political purposes.

Foo: Yes, [the money was spent on] political individuals and entities.    

Foo also confirmed that tracing of these funds were done to find out why these individuals were paid.

Muhammad Shafee: There is no spending individually on [Najib], like for instance [Najib] goes and buys a yacht.

Foo: No.

Previously on the stand, Foo testified that Najib had transfered about RM22.65 million of the illegal 1MDB money through five cheques in August 2013. This included RM20 million to Umno and RM100,000 to Umno Batu Kawan division.

The others who received the funds were:

Foo had carried out his investigations based on "first in, first out" (FIFO), an accounting method used to determine "clean" and "dirty" money in money-laundering investigations.

Foo, who is the prosecution's 48th witness, is currently the assistant director of the federal police's Anti-Money Laundering Investigation Division.

He is the IO who traced monies in Najib's personal account which received about RM2.08 billion from Tanore Finance Corp, an outfit linked to fugitive financier Low Taek Jho (Jho Low).

Foo's investigations centres on the third phase of the 1MDB debacle, known as the Tanore phase, which refers to the issuance of a US$3 billion bond by 1MDB via its wholly owned subsidiary, 1MDB Global Investment Ltd (1GIL), in 2013, leading to the 21 money-laundering charges against Najib in this trial.

During the cross-examination on Tuesday, Muhammad Shafee also referred to Tanore's bank statement with Falcon Bank. He said that based on the statement, there was an overdraft taken by Tanore and that money was the funds transfered to Najib in March 2021.

"I'm suggesting that the minus means Tanore took an overdraft of US$620 million, and that overdraft was paid into Najib's account. It is not illegal money, it is the bank's money," the lawyer said.

Muhammad Shafee said this is not technical issue but rather a matter of fact. He noted that the illegal money came into Tanore's account only after that overdraft transfer to Najib.

Foo disagreed with Muhammad Shafee's assertion, and this led to the defence counsel and the witness going around in circles.

Muhammad Shafee argued that it is important to establish which monies were sent to Najib, whether it was the overdraft or the funds from the bond.

Foo, however, said he disagrees with the defence counsel's assertion that the monies sent to Najib were not ill-gotten gains, as there were funds from other entities linked to 1MDBGIL.

Muhammad Shafee: Whether it is an overdraft or facility has not been clarified with Falcon Bank? [...] The uncertainty is unresolved.

Again, Foo asserted that he disagreed with this assertion. He added that this is because he is seeing this from the whole investigation point of view.

Muhammad Shafee then said that although he understands where Foo was coming from, the defence has a different way of looking at this and asked Foo for an answer.

But Foo disagreed with the assertion that the US$620 million was not illegal monies.  

Muhammad Shafee also asked Foo if anyone from Falcon Bank in Singapore was interviewed. The IO answered in the negative.

Foo: Falcon bank was closed at that time of the investigations.

Muhammad Shafee: The bank is closed but not the individuals. The individuals would be able to explain what this minus is.

Apart from the 21 money laundering charges, Najib is facing four counts of abuse of power for using his position as prime minister, finance minister and 1MDB board of advisers' chairman to receive gratification worth RM2.277 billion.

The trial before judge Datuk Collin Lawrence Sequerah continues on Wednesday with the continued cross examination of Foo.

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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