KUALA LUMPUR (Jan 24): The idea of having 1Malaysia Development Bhd (1MDB) issue US$3 billion worth of bonds backed by a letter of support (LOS) from the Malaysian government was proposed by Tim Leissner to then prime minister Datuk Seri Najib Razak at a meeting in Davos, Switzerland in early 2013, a witness told the High Court here on Wednesday.

Malaysian Anti-Corruption Commission investigating officer Nur Aida Arifin, who was reading out her witness statement during the 1MDB-Tanore trial on Wednesday, said the meeting in Davos was also attended by Michael Evans. At the time, both Evans and Leissner were with Goldman Sachs, which was later appointed to arrange the bond issuance for 1MDB.

This testimony, however, was objected to by Najib's counsel Tania Scivetti, who slammed it as merely hearsay as there is no evidence to suggest that such a meeting took place.

Deputy public prosecutor Ahmad Akram Gharib, however, informed the bench that the prosecution will be calling witnesses to testify about this Davos meeting.

Earlier, Nur Aida told the court that Najib had used his official capacity to get an LOS for 1MDB's US$3 billion (about RM13.26 billion) bond issuance approved. The debt is now being borne by the Malaysian government as 1MDB had failed to repay the debt.

She said her investigations into 1MDB found that Najib:

These steps that Najib took, according to Nur Aida, are linked to the third phase of the 1MDB case, which involves a purported joint venture between 1MDB and Aabar in equal shares. The 50:50 joint venture company was called Abu Dhabi Malaysia Investment Company Ltd (Admic).  

The purpose of this joint venture was to develop TRX, or the Tun Razak Exchange, in Kuala Lumpur. International Petroleum Investment Company (IPIC) was to guarantee Aabar's investment.

To raise money for this development, the US$3 billion bond, arranged by Goldman Sachs, was issued, according to Nur Aida.

Nur Aida went on to say that Najib then gave the mandate to the then treasury secretary general and the management of 1MDB to commence the Admic joint venture.

She said Najib had also hastened the issuance of the LOS for the bond issuance without taking into consideration views put forth by the Ministry of Finance (MOF), repeating what ex-MOF deputy secretary general Datuk Siti Zauyah Md Desa had previously told the High Court on June 15, 2022.

She also said Najib had instructed former 1MDB chief executive officer Mohd Hazem Abdul Rahman not to touch the US$3 billion although it was for the use of the TRX project, but to allow the money to be transferred to an investment account at BSI Bank in Switzerland.

However, Scivetti objected to these claims by Nur Aida, saying they were merely hearsay, which judge Datuk Collin Lawrence Sequerah took note of.

According to the prosecution's opening statement for this trial, a sum of US$2.721 billion was disbursed into the account of 1MBD GIL with BSI Bank at Lugano in Switzerland on March 19, 2013. The balance went to pay Goldman Sachs' fees.

The prosecution alleged that US$681 million out of the funds raised was then transferred to Najib’s bank accounts between March 21, 2013 and April 10, 2013.

Najib is facing 25 charges — four for abuse of power and 21 for money laundering — over these 1MDB funds he allegedly received in his personal bank accounts.

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