PUTRAJAYA (Jan 15): The notion of having economic powerhouse China settle the debts accumulated by troubled state strategic development firm 1Malaysia Development Bhd (1MDB) and SRC International Sdn Bhd is "absurd", the High Court heard on Wednesday.
Former prime minister Datuk Seri Najib Razak said this while testifying in his defence in the ongoing 1MDB-Tanore trial, adding that any such arrangements would be subject to "severe international condemnation".
"How can the China government pay off? It will look ridiculous, and [would be] subject to severe international condemnation.
"There is no way they can settle the debt. It is not logical. They build the infrastructure project, and we pay them. How to settle the debt? People [will] ask a lot of questions. It would be an absurd scheme," said the now-imprisoned 71-year-old.
The ex-PM was replying to deputy public prosecutor Ahmad Akram Gharib's query on Datuk Amhari Efendi Nazaruddin's testimony that the former special officer to Najib was sent on a trip to China in June 2016 to negotiate a bailout for 1MDB and SRC.
On the stand on Wednesday, Najib denied issuing any such directive. He said that he had only instructed Amhari to go to China as a reconnaissance exercise, to see if there was any interest from China, before initiating more substantial discussions.
"There was no evidence to settle, and there was no instruction [to do so]," Najib said.
When Akram suggested that settling 1MDB and SRC debts encompassed part of Najib's interest, the ex-PM disagreed.
Amhari, who is the prosecution's eighth witness, had testified that he was sent to Beijing to cut infrastructure deals involving rail and gas pipelines worth tens of billions of ringgit with China. He was to convince the Chinese to bail out 1MDB, in exchange for Malaysia awarding key infrastructure projects to China’s state-owned enterprises.
Amhari claimed his visit to China’s state-owned Assets Supervision and Administration Commission in 2016 was known only to Najib and fugitive businessman Low Taek Jho (Jho Low). Jho Low took care of the logistics of the trip.
According to previous reports, one of the bailout deals signed with China included the development of the East Coast Rail Link at a cost of RM65.5 billion — a figure that was more than double the actual cost, as it also involved the contractor, China Communications Construction Co Ltd (CCCC), taking over the following 1MDB assets: a piece of land in Ayer Itam, Brazen Sky Ltd, RM6.24 billion worth of units in 1MDB Global Investment Ltd, along with the entire stake in 1MDB Energy Holdings Ltd.
On Wednesday, Najib added that 1MDB officials did not have any negotiations to settle its debt with Chinese officials.
He also said that some of the projects that Amhari had discussed with the Chines hadn't transpired.
Najib: No need for Amhari to understand Mandarin, as China has interpreters
Najib also said that as this was just a preliminary trip to test waters, there was no need to send representatives from Wisma Putra, adding that the Foreign Ministry would only come in when discussions were a bit more substantial.
The ex-PM also stressed that although there were other officers who were more qualified, the trip concerned economics and infrastructure specifically, which Amhari could handle.
"He was the head of the economic division at the PMO (Prime Minister's Office). He was not involved in negotiations, [or] complex issues. He just had to have a clear indication that there was interest from China," Najib said.
During his testimony, Amhari had also said that Jho Low was present during the 2016 meetings in Beijing, although he was not aware that the now-fugitive would be present.
Notably, Amhari had testified that Jho Low did most of the talking, and that Amhari did not understand some things as the discussions were conducted in Mandarin. He also said that Jho Low had at times made him pause, so that the businessman could translate into Chinese what he had said.
Akram then highlighted that Amhari did not speak or understand Mandarin. To this, Najib said that China is an advanced country, and would have translators for such matters, especially for business matters.
Najib: At that time, I trusted Amhari
Amhari then flew to Abu Dhabi, as Najib had also appointed him as his liaison officer in the deal with Abu Dhabi’s sovereign wealth fund, Mubadala Development Co, on the 1MDB settlement agreement with the International Petroleum Investment Company (IPIC).
During Amhari's testimony, it was also highlighted that he was a fairly junior officer in the PMO, and questions were raised as to why he was given the responsibility with such substantial assignments.
Najib said that he had sent Amhari there as his representative and not 1MDB.
Akram: You choose Amhari rather than [anyone from] 1MDB?
Najib: At that time, I trusted Amhari.
Amhari was a Bank Negara Malaysia scholar-turned-government official, who served in the PMO in 2006, and was a special officer to Najib from 2008 until May 2018.
With a Bachelor of Economics from the University of Warwick, Amhari studied free-trade agreement negotiations under the central bank, and then transferred to Khazanah Nasional Bhd as a director in 2016, after asking Najib to appoint him to a government-linked company so he could earn more. He made the request during his secondment to the PMO.
In this trial, Najib faces four abuse of power and 21 money-laundering charges.
The trial before presiding judge Datuk Collin Lawrence Sequerah continues.