Najib: I don’t have personal interests in PSI deals, quizzed Bakke and board over opening of JV account before approval

Sunday 19 Jan 2025

KUALA LUMPUR (Dec 4): Jailed former prime minister Datuk Seri Najib Razak denied on Wednesday he had any personal interests in the PetroSaudi International Ltd (PSI) joint venture (JV), maintaining that what was done in 2009 was for national interests.

Najib, 71, on the third day of his defence in the 1Malaysia Development Bhd-Tanore (1MDB-Tanore) trial, said he also questioned former 1MDB board of directors chairman Tan Sri Mohd Bakke Salleh and the board for deciding to open a JV account with PSI at BSI Bank a day before the board meeting.

“I do not have any personal interests in the JV. If I did, I could have dictated to the BOD the timing of signing the JV agreement, the specific entity to partner with, the terms agreed upon, and even the choice of bank for opening an account.

“None of this occurred, despite the prosecution’s claim that I purportedly directed the board. What has happened, however, is that the prosecution has grossly exaggerated the significance of my brief exchange with Bakke.

“The only interest I had in the JV with PSI was rooted in national interest. Specifically, I recognised its potential to enhance the welfare of Muslims in Malaysia, including the prospect of securing an increased haj quota, a matter of significant importance to the community,” the former PM added.

Najib also denied responsibility over the loss of US$1 billion after the 1MDB special board meeting on Sept 26, 2009.

“Firstly, the loss of US$1 billion cannot be attributed to me, nor to any alleged directive for the board to pass a resolution to participate in a JV with PSI or to any purported nefarious interest on my part. Instead, the responsibility lies squarely with the management, particularly [then 1MDB chief executive officer] Datuk Shahrol Azral Ibrahim Halmi,” Najib said.

“Shahrol was never authorised or directed to enter into a JV with PetroSaudi Holdings (Cayman) Ltd (PSH). This was in direct contravention of the board’s resolution on Sept 26, 2009, and by extension, the alleged direction by me as the PM, finance minister, and chairman of the BOD,” Najib said.

'JV was supposed to be with PSI, not PetroSaudi Holdings'

Najib denied that he had a role to participate in a JV with PSH, as the JV should have been with PSI.

“Apart from that, the following ample evidence adduced during the course of this trial, which was not shown to me by the Malaysian Anti-Corruption Commission (MACC) recording officer during the recording of my statement, supports that my brief exchange with Bakke had in truth no effect on him nor the board in passing a resolution on the Sept 26, 2009 to participate in a JV with PSI.

“There was an earlier BOD meeting on Sept 18, 2009, where the board had already agreed to participate in a JV with PSI,” he said, adding that the BOD’s conduct shows that they were ready, and in fact, eager, to partner up with PSI.

He denied the prosecution’s assertion that he had forced the BOD to enter into the JV with PSI.

“This is utterly disingenuous. Of all the conducts of the BOD which I just referred to, including the act of opening the joint bank account at BSI one day before the purported ‘direction’ given by me, is most telling, as the board were raring to get down to business before my brief exchange with Bakke. The evidence shows that the board was very keen to collaborate with PSI. Otherwise, they would not have opened a JV bank account at BSI.

“I have heard Bakke’s testimony that the approval for the opening of the account with PSI was merely an early preparation before the JV was approved by the board. However, this reasoning is entirely baseless and defies logic.

“As an experienced corporate figure, Bakke would know that no board approves the opening of a joint account in the name of a JV company, unless there is already a clear intention to proceed with the JV. Approving such a step beforehand would be akin to putting the cart before the horse — or more aptly, putting the roof on before the foundation is laid,” the former PM said.

Najib said the only logical explanation for the board’s decision to approve the opening of the joint bank account with PSI at BSI is that the board had already decided to participate in the JV with PSI.

Najib on Wednesday. (Photo by Zahid Izzani)

“Bakke’s claim is an attempt to rewrite the narrative, but the evidence, including the board’s conduct leading up to the approval, clearly shows the board had made up its mind well before my brief exchange with him on Sept 26, 2009. The prosecution’s assertion, based on Bakke’s testimony, collapses under the weight of his own contradictions,” Najib said, adding that the MACC did not show to him the BOD circular resolution, dated Sept 25, 2009, authorising the opening of the joint bank account.

MACC non-disclosure showed investigations 'one-sided'

Najib said the MACC investigation’s non-disclosure of the Sept 25, 2009 resolution showed the one-sided, disproportionate, and unjust nature of the investigation carried out against him, as the resolution directly reflects the board’s independent decision and would have clarified his absence of purportedly directing the board to pass the resolution.

“If indeed the board was still contemplating about the JV, and especially while the due diligence exercise was not yet finalised, they would not have set up the bank account to remit the US$1 billion. Also, the board would have appointed corporate representatives to the JV after Sept 26, 2009, not before, and the opening of the joint bank account would have been resolved on or after Sept 26, 2009, not before,” he said.

Najib further denied his instructions to Bakke on Sept 26, 2009 to firm up the JV deal, which could not be construed by the BOD and management as being a licence to throw caution to the wind and sign the JV agreement mindlessly and recklessly. To firm things up could be interpreted for the BOD to define and delineate the terms of the proposed JV and to decide one way or the other.

“If the board viewed this as a directive, it still fails to explain their subsequent actions. They went on to sign the JV agreement with the wrong entity — PetroSaudi Holdings (Cayman) Ltd, and during the board meeting on Oct 3, 2009, instructed the management to have US$700 million repatriated to 1MDB.

“Both these actions would have directly contradicted and undermined the alleged ‘wishes’ or ‘directions’ purportedly given by me,” Najib said, adding that Bakke, who prided himself on good governance, would have ensured that, and recorded what Najib had said in the minutes, but this was absent.

On Tuesday, Najib denied pressuring 1MDB to enter into the JV with PSI.

The trial before judge Datuk Collin Lawrence Sequerah continues.

Edited ByAniza Damis

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