Najib’s 1MDB Trial: Day 28

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1MDB gave Ernst & Young the Murabahah agreement to show where the money went in 2009, an alleged move to keep Ernst & Young from asking where the money actually went.

9.28am: The accused, former prime minister Najib Abdul Razak enters the High Court and takes a seat at the front row of the public gallery to await proceedings to begin.

9.44am: Najib enters the dock as proceedings begin.

NST

10.07am: Lead prosecutor Gopal Sri Ram wants to impose stricter bail conditions on Najib after his appearance in Tg Piai over the weekend despite being on MC for his eye infection.

Shafee says his client still has the infection.

10.10am: The Kuala Lumpur High Court warns that it will not tolerate any attempt to mislead it following Najib’s attendance of the Tanjung Piai by-election nomination day despite getting a one-day MC from attending the trial.

Judge Collin Lawrence Sequerah issues the stern reminder following an application by Sri Ram for the court for sanction be imposed on the accused.

It was reported on Thursday last week that proceedings had to be adjourned due to Najib obtaining a one-day MC for eye allergy which purportedly made his eyes swell with irritation and pain.

However, it was also reported on Friday that Najib was seen going to Johor for the by-election nomination day.

“This court will not tolerate any attempt to mislead it. Should the need arise, the court will not hesitate to punish with contempt.

“But after listening to both parties, the court does not see the situation to impose sanctions,” Sequerah says after listening to submission from both parties.

Earlier during submission, Sri Ram points out that the prosecution has instructions from Attorney-General Tommy Thomas to seek for the court to impose sanction on Najib via way of restricting him within the Federal Territory and to report to the police station closest to his house every Saturday from 9am.

Sri Ram says that the AG seeks this as it was “miraculous” that the eye problem disappeared a short while after Thursday and that Najib was able to go to Johor.

He says that a public outcry occurred, and the public prosecutor received a number of complaints and a police report was even lodged by someone over the issue.

“We submit the accused is using his MC as abuse to obtain adjournment and prolong the trial. There must be sanction on this utter contempt for court proceedings,” Sri Ram submits.

Shafee counters that the AG did not do proper research and merely issued the directive to the prosecution team while he (Thomas) was overseas.

Shafee argues that the MC was only for a day and that Najib was able to go to Johor as the irritation had disappeared, but the swelling was still there.

He also challenged the person who lodged the police report to be brave enough to come before this court and lodge the complaint.

“He is obviously hiding behind someone’s skirt and made an erroneous complaint and trying to prejudice my client,” Shafee submits.

10.35am: Shafee begins cross-examining former 1MDB CEO Shahrol Azral Ibrahim Halmi.

Shafee asks about the process where the US$1 billion invested in the 1MDB-PetroSaudi joint venture is turned into Murabahah notes.

10.40am: The court hears that Najib had in 2010 approved for 1MDB to dispose of its US$1 billion shares in the 1MDB-PetroSaudi Holdings (Cayman) Ltd joint-venture company.

Shahrol says the method of the disposal of the shares, however, was decided by 1MDB board of directors.

He testifies that the board was not required to get permission from Najib on the method of shares disposal as he had already given approval for it to be disposed of.

For the record, 1MDB board of directors had in March 2010 approved to dispose of the US$1 billion shares in terms of indebtedness by the joint-venture company to 1MDB in Murabahah (a form of Islamic financing) notes worth US$1.2 billion.

This means that instead of receiving cash for disposing of its shares, 1MDB received a document which said that the 1MDB-PetroSaudi (Cayman) Ltd JV company owes it US$1.2 billion.

10.55am: Shahrol says he asked Jho Low, Patrick Mahoney and Casey Tang about the US$1 billion and where it went after Ernst & Young started asking questions.

10.57am: Shafee suggests that 1MDB gave Ernst & Young the Murabahah agreement to show where the money went in 2009.

Shahrol agreed that this was a move to keep Ernst & Young from asking where the money actually went.

10.59am: Shahrol says he saw minutes where non-executive directors had a meeting with Najib and he had assured them that the relationship with PSI must be kept.

He wanted the PSI relationship to continue because of Najib.

11am: Shafee asks if Ernst & Young refused to sign off 1MDB’s auditor report because it failed to meet standards.

11.02am: Shahrol didn’t inform Najib about this but he did ask Jho Low.

Shafee asks why the board of advisers didn’t take it up with Najib himself. Shahrol says they were looking for a solution to close its books for that year.

Shafee suggests this was an attempt to sweep the real financial health of 1MDB under the carpet, to which Shahrol denies “absolutely not”.

11.35pm: Court is in session after a short break.

11.37am: Shafee brings out a MalaysiaKini report, which states that the court had reprimanded Najib over his Tg Piai trip. Shafee says the headline could be misleading.

Justice Sequerah clarifies that what he had said was that he had not found misbehaviour on Najib’s part. Shafee continues cross-examination.

12.02pm: Shahrol talks about 1MDB taking possession of KLIFD and land in Sungai Besi. He says he does not remember the dates they were owned by 1MDB.

12.10pm: The court hears from Shahrol that 1MDB had in mid-2010 planned to venture into development projects in the Kuala Lumpur International Finance District (KLIFD), now known as the Tun Razak Xchange or TRX, and the piece of land where the old Sungai Besi military airport was located.

According to Shahrol Azral Ibrahim Halmi, the plan was to raise RM5 billion and RM10 billion through loans for the KLIFD and Sungai Besi projects, respectively.

Afif Abd Halim/TMI

He says that 1MDB, however, only raised some RM1 billion for the KLIFD project while the RM10 billion for the airport land development was never raised.

However, according to him, only some of the funds raised for KLIFD went to the project.

Shafee: Were the RM5 billion and RM10 billion in funds raised by 1MDB?

Shahrol: For the RM5 billion, yes. The RM10 billion, no.

Shafee: To finance what?

Shahrol: To finance these two projects, Sungai Besi (airport land development) and TRX.

Shafee: Was the RM5 billion ever used for the project (TRX)?

Shahrol: Only a very tiny proportion was used for TRX if I recall correctly, although I would have to look at financial records

Mostly (the money went) to PSI for additional tranches for the Murabahah agreement we spoke earlier.

Shafee: This is another familiar scenario, namely that the board was told the KLIFD project and Sungai Besi project would require RM5 billion and RM10 billion. You managed to raise RM5 billion first.

Shahrol: We eventually (only) borrowed RM500 million plus about RM700 million. I don’t think that comes up to RM5 billion.

12.30pm: The court hears from Shahrol that his past interaction with Najib made the former comfortable with the veracity of PSI.

When Shafee asks if Najib had ever said he knew for a fact who specifically was the owner of PSI, Shahrol admits Najib never said that.

Shafee: As prime minister (Najib) in his capacity as shareholder, you cannot expect him to do due diligence?

Shahrol: In general, yes. But in this (situation), in my perception is Najib has personally invested in this relationship, has met up with Prince Turki (of Saudi Arabia) on a holiday. I cannot say one way or the other if the prime minister would have the capacity to do due diligence.

When Shafee asks if someone professional should have been the one performing the due diligence such as 1MDB itself, Shahrol agrees.

12.38pm: Shahrol admits PSI was a vehicle for fraud and set up to take money from 1MDB to channel it elsewhere.

12.48pm: Court breaks for lunch.

2.52pm: Court resumes session.

3.13pm: Shafee asks Shahrol about a proposition by PSI that 1MDB acquire a 4.2% stake in a French company known as GDF Suez, which is involved in energy, electrical, and gas with a 20% discount.

Shafee tells Shahrol this was another con deal. Shahrol agrees that in hindsight it was a sham deal as the numbers didn’t add up.

Shafee also suggests the 20% discount was illegal. Shahrol says he didn’t know that.

3.30pm: The court hears that despite 1MDB holding a 40 per cent share in the joint venture company with PetroSaudi Holdings (Cayman) Ltd, the latter had full control of the joint-venture vehicle.

Shahrol says this under cross-examination by Shafee.

He tells the court that PetroSaudi simply dismissed 1MDB’s numerous requests for information and to hold board meetings for the joint-venture company.

According to Shahrol, as PetroSaudi holds a 60 per cent share, the joint-venture company’s chairperson comes from PetroSaudi and holds the casting vote in the joint venture.

3.43pm: Court adjourns early today as Sequerah has a prior engagement.

He reminds the lawyers that tomorrow they will continue until 6pm.

Court is adjourned.

Proceedings will resume at 9.30am tomorrow.


Earlier reports:

Nov 4, 1MDB Trial: Judge Reprimands Najib After Tg Piai Trip

Oct 31, Najib Calls in Sick with Swollen Eyes, 1MDB Trial Postponed Yet Again

Oct 30, Najib’s 1MDB Trial: Day 27

Oct 29, Najib’s 1MDB Trial: Day 26

Oct 24, Najib’s 1MDB Trial: Day 25

Oct 24, Najib Asks Prosecution to Hand Over Justo’s Information Given to MACC

Oct 21, Najib’s 1MDB Trial: Day 24

Oct 17, Najib’s 1MDB Trial: Day 23

Oct 17, Jho Low Changed 1MDB Constitution to Give Najib Absolute Power

Oct 16, Najib’s 1MDB Trial: Day 22

Oct 14, Najib’s 1MDB Trial: Day 21

Oct 10, Najib’s 1MDB Trial: Day 20

Oct 9, Najib’s 1MDB Trial: Day 19

Oct 8, Najib’s 1MDB Trial: Day 18

Oct 7, Najib’s 1MDB Trial: Day 17

Oct 7, Some Umno People Envious of Jho Low-Najib Ties, Court Told

Oct 1, Najib’s 1MDB Trial: Day 16

Oct 1, Arul Kanda Told Ex-1MDB CEO to Leave Country to Avoid PAC Meeting

Oct 1, Ex-1MDB CEO Paid RM99K Monthly, RM1.5M Bonus

Oct 1, Jho Low Helped Plan Abu Dhabi Crown Prince’s Trip to Sway Voters for GE13

Sept 30, Najib’s 1MDB Trial: Day 15

Sept 30, Witness: Najib Used 1MDB to Raise Funds for GE13

Sept 26, Najib’s 1MDB Trial: Day 14

Sept 26, Jho Low, Tim Leissner Played “Matchmaker” for Najib to Meet Goldman Sachs

Sept 26, US$9M Transferred from Jho Low’s Good Star to Riza Aziz’s Red Granite Pictures

Sept 26, Jho Low, Najib Faked Meeting Minutes to Move US$750M from 1MDB to PSI

Sept 26, Najib Agreed to 1MDB Borrowing RM3B from SOCSO to Lend to PetroSaudi

Sept 25, Najib’s 1MDB Trial: Day 13

Sept 24, Najib’s 1MDB Trial: Day 12

Sept 23, Najib’s 1MDB Trial: Day 11

Sept 19, Najib’s 1MDB Trial: Day 10

Sept 18, Najib’s 1MDB Trial: Day Nine

Sept 18, Najib’s Ex-Aide Led MACC to Raid on Jho Low’s Apartment

Sept 18, Najib’s 1MDB Trial Halted Briefly for Najib to See Eye Specialist

Sept 17, Najib’s 1MDB Trial: Day Eight

Sept 17, Witness Identifies Riza Aziz, Arul Kanda and Five Others as Key Players in 1MDB Saga

Sept 17, Bono, Queen of Jordan, Rosmah Floated as Trustees for TIA

Sept 17, Witness Says 1MDB Najib’s Baby, Defence Claims It Was Terengganu Sultan’s Idea

Sept 11, Najib’s Eye Infection Halts 1MDB Trial

Sept 10, Najib’s 1MDB Trial: Day Six

Sept 10, Rosmah Fond of Jho Low

Sept 10, Najib’s Ex-Aide: Jho Low Provided Scripted Responses to Deny His Involvement in 1MDB

Sept 10, Istana Negara Questioned Jho Low’s Role in 1MDB Predecessor TIA

Sept 5, Najib’s 1MDB Trial: Day Five

Sept 5, 1MDB Trial: Judge Raps Shafee over Najib’s Tardiness

Sept 5, 1MDB Trial: Najib’s Ex-Aide Took US$200K Loan from Jho Low to Buy Property

Sept 5, 1MDB Trial: Najib’s Ex-Aide Accused of Lying

Sept 4, Najib’s 1MDB Trial: Day Four

Sept 4, Najib’s Ex-Aide: Mudabala CEO Was Promised All Sorts of Things

Sept 4, Najib’s Ex-Aide, Jho Low on “Secret China Mission” to Bail Out 1MDB

Sept 4, Jho Low Ordered Najib’s Ex-Aides to Open Overseas Bank Accounts

Sept 3, Najib’s 1MDB Trial: Day Three

Sept 3, Najib’s Ex-Aide: Jho Low Drew Out Wealth Fund Concept on Kitchen Whiteboard

Sept 3, Jho Low Gave Possibly Forged Letters from Saudi Arabia to Stop 1MDB Probe

Sept 3, Only Najib and Jho Low Knew “Full Picture” of 1MDB Plan

Sept 3, Jho Low in Najib’s Inner Circle

Aug 29, Najib’s 1MDB Trial: Day Two

Aug 28, Najib’s 1MDB Trial: Day One

Aug 28, Shafee: Prove Najib Knew Arab Donation Letter Faked, Jho Low Is Najib’s Alter Ego

Aug 28, Najib’s 1MDB Trial: Shafee Again Questions Sri Ram’s Appointment

Aug 28, Najib’s 1MDB Trial: Gopal Sri Ram’s Full Opening Statement

Aug 28, Najib’s 1MDB Trial: Prosecution to Show Saudi Donations a Sham

Aug 28, Najib’s 1 MDB Trial: Prosecution to Prove Jho Low Was Najib’s Alter Ego

Aug 28, Najib’s 1MDB Trial Begins