KUALA LUMPUR (Dec 10): There was no "preferential treatment" for 1Malaysia Development Bhd's (1MDB) proposed joint venture (JV) with Aabar Investments PJS in 2013, the court heard on Tuesday. 

Testifying in his defence in the ongoing 1MDB-Tanore trial, former prime minister Datuk Seri Najib Razak said that the government assurance to back the US$3 billion JV between 1MDB and Aabar was expedited, but went through standard Ministry of Finance (MOF) procedures. 

"There was no question of any preferential treatment given to the request. The matter, although [it] was expedited, went through the normal procedures at the MOF," Najib said on Tuesday. 

Defence counsel Wan Azwan Aiman Wan Fakhruddin: What's the difference between 'rushed' and 'expedited'? 

Najib: [The] tight timeline [was due to the] impending visit [of] Abu Dhabi [royal Sheikh Mohamed bin Zayed Al-Nahyan]. This was an important visit. We wanted to secure investment and economic opportunities. [By] expediting it, checks and procedures were followed. It was not rushed. ['Rushed' indicates that] normal procedures were waived aside, but in this case, they were not. They were adhered to,” said Najib.

In gist, the matter involves the third phase of the 1MDB scam, which concerns a JV between 1MDB and Abu Dhabi-based Aabar, called the Abu Dhabi Malaysia Investment Company Ltd (ADMIC).

The MOF, which was headed by Najib, issued a letter of support (LOS) in March 2013, guaranteeing 1MDB's investment in the JV.

Abu Dhabi's International Petroleum Investment Company (IPIC) was to guarantee Aabar's investment. A loan of US$3 billion was raised through a bond issuance.

However, the JV was instead entered into with Aabar Investments PJS Ltd — a fake entity. And thus, the monies were not only misappropriated, but Malaysia was left saddled with more 1MDB debt.

The LOS is an indirect guarantee, where, if the company fails to repay the loan, the parent company will have to settle the company's payments. If the holding company fails, then the government will be held accountable for the loan.

The matter in focus also revolves around the third abuse of power charge against the ex-PM.

Former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah had previously testified that the speed and urgency of issuing the LOS was "the fastest", without certain documents, at the behest of Najib's then aide, the late Datuk Azlin Alias.

On the stand on Tuesday, Najib said that he had never instructed Azlin to do so, but it would not be "wrong" as Azlin was the economic director at the Prime Minister's Office.

Najib said he gave his approval for the JV with Aabar, because he had no reason to doubt that the 1MDB management and board had studied and considered the proposal at length.

Najib also testified that it was not until the trial that he learnt that Aabar Investments PJS Ltd was a "bogus entity" set up by Mohamed Badaway Al-Husseiny, with no affiliation either to the real Aabar or IPIC.

During Tuesday's proceedings, Najib repeated that fugitive businessman Low Taek Jho (Jho Low) was not acting on his behalf, neither did he instruct Jho Low to carry out his directives.

"As far as Jho Low was concerned, my interaction with him was on the basis that he was acting for the Middle East in bringing their proposals for investment opportunities into Malaysia. That was what he did with Mubadala in the Iskandar development in Johor," Najib said. 

The prosecution in the trial had argued that Jho Low was Najib’s “mirror image” (alter ego), and that the two had worked hand in glove to siphon money out of 1MDB’s coffers.

Najib also reiterated on Tuesday that there was no "top-down" approach in 1MDB as claimed by several witnesses, where he was allegedly the apex power broker. 

"There was no top-down approach, and the BOD (board of directors) were at liberty to decide on what was best for the company, without any constraints or consequences from MOF Inc," Najib said. 

The former finance minister also testified that he was not part of any scheme to plunder 1MDB, and any of his approvals for the company's deals and transactions were based on the reasonable assumption that the management and the company's BOD had fully carried out their fiduciary duties. 

The ex-PM also pointed out that the misappropriation of the state strategic development company's monies "were directly connected to the execution of those proposals, and not because of such approvals themselves”.

"All my approvals were consistent with what the management had represented to me through the minutes of representative and shareholder's special resolutions and other official documents. 

"If I was misled into believing the misrepresentation made by the management, it was solely because of their misrepresentation to me and my trust that the necessary corporate governance had been complied with on the ground.

"It should never mean that I was involved in the scheme, was aware, or had condoned what the management had been up to in the company," he said. 

In this trial, Najib faces four abuses of power and 21 money-laundering charges.

The trial before presiding judge Datuk Collin Lawrence Sequerah continues.

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