KUALA LUMPUR (Jan 5): An investigating officer (IO) from the Malaysian Anti-Corruption Commission (MACC) surmised that Datuk Seri Najib Razak’s meeting with PetroSaudi International’s (PSI) Tarek Obaid and fugitive Low Taek Jho (Jho Low) during a vacation in southern France in 2009, which discussed a proposed joint venture (JV), amounted to a non-formal and invalid discussion that resulted in losses of billions of ringgit.
Nur Aida Arifin, the 49th prosecution witness, said that Najib, as the then prime minister, should have known that the JV to form 1MDB PetroSaudi Ltd through high-level government-to-government (G2G) discussions was done not through a formal official diplomatic channel, as the discussion on a yacht was not considered formal.
“Najib himself admitted the meeting as a benchmark for G2G discussions, which he promoted to this very day. The vacation by Najib’s family had turned into a discussion on a diplomatic JV without a formal and valid diplomatic channel, resulting in losses to the country.
“The discussion did not involve any other high-level government officials, whereas the government had to bear the loan with the issuance of a full government guarantee for the loan. Najib as the prime minister should have known that the G2G JV high-level discussion required a legitimate diplomatic channel rather than causation from an informal discussion on a cruise ship only,” she added.
The IO was stating her views on the result of her investigation into the 1Malaysia Development Bhd (1MDB)-PSI deal, which resulted in losses suffered by the government. She was testifying in the 1MDB-Tanore trial, where Najib faces four abuse of power charges and 21 money-laundering charges involving RM2.27 billion of 1MDB funds.
1MDB had paid out US$1 billion for the formation of the JV, where US$300 million went to 1MDB PetroSaudi, another US$700 million to Good Star Ltd, and another RM1 billion (US$330 million) from the murabaha financing agreement in 2010.
Good Star was a company controlled by Jho Low.
Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah objected to Nur Aida’s testimony on this issue, complaining to presiding Court of Appeal judge Datuk Collin Lawrence Sequerah that the opinion by the IO should not be considered, as the court should be the one forming its final opinion.
Nur Aida, meanwhile, said that the yacht holiday meeting also included Prince Turki and Najib’s family members.
'Najib used Jho Low and Shahrol'
The witness added that her investigation also showed that Najib allegedly used Jho Low and former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi to force the 1MDB board of directors through then chairman Tan Sri Mohd Bakke Salleh to follow his directive and proposals in relation to the JV with PSI.
“The reason always cited was that this was to maintain the G2G relations between Malaysia and Saudi Arabia. As a result of this, many decisions and approvals were made, which were not in 1MDB and the Malaysian government’s favour,” she said.
Nur Aida also pointed to the appointment of Edward L Morse as the asset valuer for PSI assets of between US$2.7 billion and US$4.5 billion, a hefty sum, where the report was prepared within eight days.
“Najib also instructed Shahrol not to make a second valuation of PSI assets on the ground, wanting to look after bilateral ties between Malaysia and Arab Saudi and maintain political ties,” she said.
Nur Aida said Najib in his official conduct was responsible for issuing the finance minister’s memorandum No 216/2639/2009, to get the approval of the Cabinet, so that the Malaysian government gave a guarantee to Terengganu Investment Authority (TIA) to allow TIA to get a RM5 billion Islamic medium-term loan.
She said Najib also decided that the federal government take over TIA, resulting in the change of its name from TIA to 1MDB, and furthermore, Najib directed the 1MDB board of directors to approve a resolution for the JV with PSI.
“Najib also caused the 1MDB board of directors to pass a directors' circular resolution to approve an additional RM1 billion loan for the murabaha financing agreement dated March 10, 2010, with 1MDB PetroSaudi.
Shafee also objected to Nur Aida’s portion of this testimony regarding her findings.
Earlier, Shafee brought to the court’s attention several media reports' headlines in relation to Tuesday’s proceedings.
The hearing before Sequerah resumes next Monday, with Nur Aida continuing her testimony.
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