KUALA LUMPUR (Sept 30): Red flags were not raised to indicate that financial transactions to former prime minister Datuk Seri Najib Razak were suspect, the court in the 1Malaysia Development Bhd-Tanore (1MDB-Tanore) trial heard on Monday.
Lead defence counsel Tan Sri Muhammad Shafee Abdullah then cited the example of the central bank's "sanction" of the controversial US$700 million remittance to Good Star, a company which belonged to fugitive businessman Low Taek Jho (Jho Low).
"The transaction was sanctioned by the central bank, and it is backed up by documentation. 1MDB [told] Deutsche Bank that Good Star was a wholly owned subsidiary. Deutsche Bank then consulted the central bank, who gave their authorisation," Shafee said.
He added that his client had "every reason" to depend on Bank Negara Malaysia (BNM) and former BNM governor Tan Sri Dr Zeti Akhtar Aziz as the "last bastion of financial integrity".
This transaction is controversial, as the management had gone against board directions and the monies were eventually misappropriated. The 1MDB board had directed that US$1 billion be deposited into the accounts of 1MDB PetroSaudi Ltd, the fund’s joint-venture (JV) company with oil services company PetroSaudi International Ltd (PSI).
Ignoring the board’s directive, however, 1MDB’s management abided by the instructions of PSI’s law firm instead and transferred the money in two separate sums of US$300 million to the JV firm’s Swiss-based JPMorgan account and US$700 million to Good Star.
Zeti had testified back in August last year that BNM was not the one that takes responsibility for the remittance of the US$1 billion. She said the financial institution or commercial bank concerned should take responsibility, and that it was the specific financial institution that had to undertake the due diligence and was required to submit the international transaction information system (ITIS).
She said that the central bank did not have the responsibility of doing the due diligence; verifying the transactions, and submitting the ITIS report.
The defence is still in the midst of submitting at the end of the prosecution's case. The prosecution has yet to submit.
Earlier, the defence also argued that the whole host of key witnesses' testimony in the trial was questionable, self-serving, and should be taken with a grain of salt.
The defence repeated this contention, arguing that the handful of key witnesses were unreliable. These witnesses, among others, include members of the 1MDB management, such as former 1MDB chief executive officer (CEO) Datuk Shahrol Azral Ibrahim Halmi, former 1MDB CEO Mohd Hazem Abdul Rahman, former 1MDB chief financial officer (CFO) Azmi Tahir, former company general counsel Jasmine Loo, former board members Tan Sri Mohd Bakke Salleh and Tan Sri Ismee Ismail, former second finance minister Datuk Seri Ahmad Husni Hanadzlah, and former deputy secretary general at the Ministry of Finance (MOF) Datuk Siti Zauyah Mohd Desa.
The defence has made similar arguments against other witnesses throughout their submissions.
The defence also circled back to Malaysian Anti-Corruption Commission (MACC) investigating officer (IO), Nur Aida Arifin's investigations, which they repeated were biased and "tunnel vision[ed]".
They claim that the anti-graft officer had failed to scrutinise the "actions and motives" of the witnesses and the "lack of critical questioning".
The trial continues on Tuesday, and trial judge Datuk Collin Lawrence Sequerah has instructed parties to complete their submissions by Oct 4.
He will then set a date to deliver his decision on whether the ex-PM has to enter his defence, or can walk free.
In this trial, Najib faces four counts of abuse of power for using his position as 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.