Najib Agreed to 1MDB Borrowing RM3B from SOCSO to Lend to PetroSaudi

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The High Court was told today that Najib Abdul Razak agreed to 1Malaysia Development Berhad (1MDB) applying for an RM3 billion loan from the Social Security Organisation (SOCSO) to lend to PetroSaudi International Limited (PSI).

Former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi, 49, while reading his witness statement, however, said he had never discussed the matter with Najib at the time.

He said Najib had agreed to 1MDB lending US$750 million to PSI, subject to 1MDB getting an RM3 billion loan from SOCSO.

Shahrol Azral said this in reference to the minutes of the meeting with the chairman of the board of advisors, dated March 30, 2011, during examination by senior deputy public prosecutor Gopal Sri Ram at the trial of the former prime minister’s case involving 1MDB.

Shahrol Azral said, in the minutes Najib had also agreed to focus on the Maybourne Hotel Group projects (a London-based hotel takeover bid by Jho Low, SRC International Sdn Bhd and Kuala Lumpur International Financial District, now known as TRX.

“I confirm that I did not discuss (the matter) with Najib at that time. The minutes of the meeting were prepared by Jho Low and signed by Najib.

“The minutes of the meeting were also given to me by Jho Low (below), but I do not remember when the minutes were handed out,” he said, noting that he signed the minutes and kept them.

The ninth prosecution witness said he informed the 1MDB board of directors at a meeting on April 4, 2011, that Najib had agreed for 1MDB to increase its commitment to PSI.

The board was stunned by the request for an additional loan payment, Shahrol said. Then board chairman Che Lodin Wok Kamaruddin had referred to a letter dated February 18, 2011, from Saudi prince Turki Abdullah and PSI CEO Tarek Obaid.

The letter proposed that 1MDB make the additional loan payment via Murabaha notes worth US$750 million.

“The board of directors was blindsided (terkilan) because the request was made directly to the 1MDB shareholder, which was Datuk Seri Najib (who headed Minister of Finance Inc).


“It was as though they were forcing the board of directors to approve the additional loan payment request,” said the witness. 

Shahrol said the US$750 million was eventually reduced to US$330 million after further discussions between him and Low.

The money was transferred to Good Star Ltd in four tranches between May 20 and October 25, 2011.