KUALA LUMPUR (April 25): Former prime minister Datuk Seri Najib Razak had never instructed 1Malaysia Development Bhd’s (1MDB) management to transfer a total US$1.03 billion to Good Star Ltd, a company linked to the fugitive Low Taek Jho (Jho Low), the court heard on Thursday.
Testifying in the ongoing 1MDB-Tanore trial, Malaysian Anti-Corruption Commission (MACC) investigating officer (IO) Nur Aida Arifin confirmed that based on documentary evidence, it was members of the troubled strategic development’s management that were involved in the transfer.
Defence counsel Wan Azwan Aiman: The US$1.03 billion was transferred to Good Star with the involvement of the management, namely (former 1MDB chief executive officer) Datuk Shahrol Azral Ibrahim Halmi, (former chief financial officer) Radhi Mohamad, (former deputy CFO) Terence Geh Choh Heng, and (former executive director) Casey Tang.
Nur Aida: No.
Wan Azwan: They were allowed to remit the US$1.03 billion into Good Star?
Nur Aida: Yes, based on documents.
Wan Azman: You agree that Najib did not instruct any management members to remit the US$1.03 million to Good Star?
Nur Aida: Agree.
The US$1.03 billion was transferred to Jho Low’s company in two tranches: US$700 million in September 2009 and US$330 million in May 2011.
While on the stand on Wednesday (April 24), Nur Aida had also testified that Najib had not instructed 1MDB’s management to make the controversial US$700 million transfer to Good Star.
The controversial transfer is related to 1MDB’s joint venture (JV) with Saudi Arabia-based PetroSaudi International Ltd (PSI), under which 1MDB undertook an equity investment of US$1 billion, while PSI injected US$1.5 billion worth of assets into the JV. However, after the JV agreement was signed, PSI said its US$1.5 billion asset injection into the JV company entailed a US$700 million advance for 1MDB, which meant 1MDB owed PSI.
But the so-called JV agreement was entered into, not with PSI but rather with a company called PetroSaudi Holdings (Cayman) Ltd.
Through instructions from Shahrol, 1MDB had diverted US$700 million from the US$1 billion JV equity investment into an account belonging to Good Star Ltd, on the grounds that Good Star was PSI’s affiliate. Only US$300 million made its way to the JV as intended.
1MDB then entered into a murabahah financing agreement in March 2010, in which a US$1 billion equity in the JV was converted into “useless” murabahah notes, and 1MDB was required to pay the JV US$1.5 billion.
In September 2010, a sum of US$500 million was sent to the JV, after which the money went missing and could not be accounted for. A further sum of US$330 million — meant to be the second tranche of the investment into the murabaha financing — was diverted to Good Star in May 2011.
In total, 1MDB transferred US$1.83 billion to PSI through the murabahah note agreement. However, only US$800 million of the money had been transferred into JV, while the rest of US$1.03 billion had been transferred to Good Star.
The prosecution has maintained that Najib had taken “positive steps” to ensure these transactions went through.
In this trial, Najib faces four counts of abuse of power for using his position as the then prime minister, then finance minister, and chairman of 1MDB’s board of advisers to receive gratifications worth US$620 million (RM2.27 billion). He also faces 21 money-laundering charges.