KUALA LUMPUR (Sept 2): Fugitive Low Taek Jho (Jho Low) was not acting on behalf of Datuk Seri Najib Razak in 1Malaysia Development Bhd (1MDB) affairs, the High Court heard on Monday.

This was established from witness testimonies that cited Jho Low’s attendance in a 1MDB board meeting in 2009 as representing a Saudi prince, defence counsel Tan Sri Muhammad Shafee Abdullah argued.

In the trial, Shafee, who represents Najib, also highlighted how the former prime minister was not called to testify in the Swiss court hearing on 1MDB, which convicted two individuals for defrauding US$1.8 billion (RM7.8 billion) from the Malaysian state-owned fund.

The defence is currently submitting at the end of the prosecution's stage of the 1MDB-Tanore trial. The ongoing submission is on an abuse of power charge Najib faces, which touches on 1MDB's joint venture (JV) with PetroSaudi International Ltd (PSI).

In the hearing on Monday, Shafee's submissions touched on Jho Low's presence in the 1MDB board meeting on Sept 26, 2009, where the purported government-to-government JV — which saw 1MDB lose US$700 million — was green lit.

The lawyer cited both former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi and Malaysian Anti-Corruption Commission investigating officer Nur Aida Arifin's testimonies, where both stated that Jho Low attended that particular meeting as the representative of Saudi's Prince Turki.

Shafee also quoted Shahrol's testimony to the Public Accounts Committee in early 2016, where Shahrol told the parliamentary body that Jho Low was in the meeting at the behest of the Saudi prince, and did not stay for the entire meeting.

"Jho Low was certainly not there on behalf of 1MDB, and certainly can't be representing Najib as [Najib] would be represented by the entire 1MDB board," Shafee said.

Jho Low, who has an Interpol Red Notice against him, was known to Najib but the ex-PM had better people to represent him, Shafee said.

"We can't run away from the facts and we have to be honest; Jho Low was known to Najib, but certainly [he was] not Najib's representative. Najib had better representatives," the lawyer told the court.

The 1MDB-PSI JV was controversial as 1MDB invested US$1 billion for equity in the JV, while PSI injected US$1.5 billion worth of assets. 

However, after the JV agreement was signed, PSI said its US$1.5 billion asset injection into the JV entailed a US$700 million advance for 1MDB, which meant 1MDB owed PSI.

But the so-called JV agreement was not entered with PSI, but between 1MDB and a Cayman Islands-registered company called PetroSaudi Holdings (Cayman) Ltd.

And instead of channelling its entire US$1 billion investment into the JV, 1MDB diverted US$700 million to Good Star Ltd, on the grounds that Good Star was PSI’s affiliate. Good Star was linked to Jho Low.

Previously, the prosecution's 15th witness, former 1MDB chairman Tan Sri Mohd Bakke Salleh testified that he resigned in October 2009 a few weeks after his reappointment.

He cited the following for his resignation: i) time constraints to approve the JV; ii) the management’s blatant disregard of the board’s advice; and iii) the split remittance.

While on the stand in mid-2022, Bakke also revealed how Jho Low took a phone call from Najib before the fateful 2009 board meeting.

Bakke said Jho Low passed the phone to him, with Najib asking him to "firm up" the JV with PSI. This phone call, Bakke testified, pushed the board to lock in the JV deal.

Shafee also touched on the Swiss Federal Criminal Court judgement last week regarding PSI executives Patrick Mahony and Tarek Obaid's involvement in the fraudulent JV.

Shafee said that the Swiss court found no finding regarding Najib, nor was his client asked to testify in the trial.

Swiss authorities did not clarify if Jho Low was acting on Najib's behalf, the lawyer added.

"He (Najib) could be examined by audio by [Swiss authorities] in this particular case, [but] no one has ever asked him," Shafee said.

On Aug 28, the Swiss court ruled that both Mahony and Obaid had deliberately deceived 1MDB's board into believing that PSI had links with the Saudi Arabian government.

They were both convicted of fraud, criminal mismanagement and money laundering.

The duo were indicted for defrauding 1MDB of US$1.8 billion to enrich themselves, with Obaid getting at least US$805 million and Mahony at least US$37 million.

Obaid was sentenced to seven years in prison, while Mahony received a sentence of six years. They were also ordered to pay back US$1.75 billion to 1MDB. Both are appealing against the decision.

In the 1MDB-Tanore trial, Najib faces four counts of abuse of power for using his position as the then prime minister, 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.

The trial before judge Datuk Collin Lawrence Sequerah continues.

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Swiss court convicts two executives over US$1.8b 1MDB fraud