KUALA LUMPUR (Dec 3): Former prime minister Datuk Seri Najib Razak said he never pressured or ordered 1Malaysia Development Bhd (1MDB) to finalise a joint venture (JV) with PetroSaudi International Ltd (PSI).

He said the phone conversation he had with 1MDB's former chairman Tan Sri Mohd Bakke Salleh prior to a board meeting to decide on the venture was not to direct or force the board to enter into the JV with PSI involving an investment of US$1 billion (RM4.46 billion), but to merely encourage Bakke to consider the proposal carefully.

Najib said this on Tuesday as he testified in his own defence at the 1MDB-Tanore trial, so named because the accusations he faces centres on 1MDB's dealings with Tanore Finance Inc, which saw money allegedly channelled into his accounts.

“It is important to clarify that my purpose in this brief exchange was not to direct or pressure the board to participate in the joint venture with PSI. Rather, my intention was to encourage Tan Sri [Mohd] Bakke [Salleh] to consider the proposal carefully,” Najib said.

“I categorically deny that my brief exchange with Bakke was meant to compel or even influence the board to participate in a joint venture with PSI. My sole intent was to support the board in making an informed decision, which I assumed would be made after hearing from PSI’s representative and of course thereafter conducting the requisite thorough review and due diligence on PSI and the JV,” he said.

At the time, 1MDB's board was grappling with how it only received RM4.3 billion worth of proceeds from its issuance of Islamic Medium Term Notes (IMTNs) to raise RM5 billion in 2009, as hundreds of millions were lost when the bonds were flipped by companies owned or controlled by Low Taek Jho (Jho Low). Bakke had previously testified that Najib, however, had asked him to focus on PSI and 1MDB's US$1 billion investment into the JV.
 

According to Bakke, Jho Low, who was not part of 1MDB, had taken a phone call from Najib and passed the phone to Bakke prior to the start of a 1MDB board meeting on Sept 26, 2009. Bakke had testified that Najib had told him not to spend too much time on 1MDB's past transactions and to firm up the JV with PSI instead.

“The phone call comprised two parts — don't spend too much time [on the past] and shift our focus to evaluating PSI JV. Although we knew the issuance of the IMTNs was an important issue to pursue," Bakke had previously told the court.  

On Tuesday, Najib told the court that he was under the impression that Jho Low was present at the meeting to represent PSI in presenting the JV proposal to 1MDB's board.

Najib’s lawyer Tan Sri Mohamed Shafee Abdullah then asked him if he had, at any one time, asked Bakke to put the phone on loud speaker so he could address the board and tell them to firm up the JV.

“No, I did not because as I explained earlier, my brief exchange with him was purely to relay the general context of this ‘government-to-government’ initiative between Malaysia and Saudi Arabia, and to support the board in making an informed decision, which I assumed would be made after hearing from PSI’s representative and of course thereafter conducting the requisite thorough review and due diligence. I placed my uttermost trust in the competence and diligence of the experienced corporate figures on the 1MDB's board of directors,” he said.

Shafee also asked Najib: “When you had the brief exchange with Tan Sri Bakke, did you direct him to convince the entire board to participate in the joint venture with PetroSaudi International Ltd?

“No, as explained earlier I did not. I merely requested Tan Sri Bakke to consider 1MDB participating in a joint venture with PetroSaudi International Ltd. I did not order or direct him to do so nor for him to in turn order or direct the rest of the board to do so as though it was a directive from me,” he said.

Najib further said that there were several facts that would negate the assumption that he could influence Bakke and the board, one of them being that it was not recorded in the meeting minutes that it was Najib’s order to firm up the JV.

“Firstly, as an experienced corporate figure, Tan Sri Bakke would not act on such an instruction, as his fiduciary duties still lie with the company. Secondly, if I had directed Tan Sri Bakke to ensure 1MDB entered into the joint venture with PetroSaudi, he would have conveyed this to the board, and such a directive would have been reflected in the minutes of the meeting [P361],” Najib said.

“However, no such directive is recorded, further supporting that my brief exchange with Tan Sri Bakke did not and was not intended to influence the board’s decision,” he added.

The JV was eventually firmed up and of the US$1 billion 1MDB investment, and US$700 million of that was diverted to Good Star Ltd, a company owned and controlled by fugitive Jho Low, of which US$20 million allegedly ended up with Najib.

In this 1MDB-Tanore trial, Najib has been charged with four counts of abuse of power in enriching himself with RM2.3 billion of 1MDB funds and 21 counts of money laundering of the same amount. He could face a fine and up to 20 years in jail if convicted.

Read also:
Najib: MACC IO deranged, deluded and unversed with diplomacy to suggest that I had G2G meeting on yacht
1MDB-Tanore: Najib unsure how Jho Low obtained his mobile number
1MDB-Tanore: Najib reiterates that he never inserted influence in TIA’s federalisation
1MDB-Tanore: Najib distances himself from Jho Low, says never conveyed instructions, wishes through the fugitive businessman
Najib disputes Ismee and Shahrol’s testimony on IMTN for TIA
1MDB Update: Two Malaysians, apart from Jho Low, profited from the 2009 1MDB bond flip