DEBUNKED

Najib’s 1MDB Trial: Day 18

October 8, 2019

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Ambank conspired with Low, without TIA knowing.

9.38am: Former prime minister Najib Razak enters the dock as proceedings begin with the resumption of lead counsel Muhammad Shafee Abdullah’s cross-examination of 9th witness, former 1MDB CEO Shahrol Azral Ibrahim Halmi.

9.50am: Shahrol testifies that he had no opportunity to tell then Agong Sultan Mizan Zainal Abidin that he was not qualified to be CEO of Terengganu Investment Authority (TIA), the predecessor to 1MDB.

He tells Shafee that his appointment was decided by people above him, namely the TIA board and stakeholders being the federal and state governments.

Shahrol says he already much earlier informed wanted financier Jho Low that he did not have experience in fundraising before he was brought before the Agong in 2009.

Before that, Shahrol was the managing director of Accenture.

“I was called to the Istana, I sat down, was introduced to the Duli Yang Maha Mulia (Agong) and given the offer.

“If I was not qualified for certain aspects, it was the people who appoint me that should have known that,” Shahrol says.

“I had zero opportunity (to tell Agong he had no experience). Tuanku was in a meeting when I was brought in (to the Istana) by Low.

“Azlan (Zainol of TIA and later 1MDB director) was already there. I was introduced to Tuanku, Azlan who said a few words,” Shahrol adds.

10am: The court hears from Shahrol that he might have been chosen by Jho Low to be 1MDB CEO due to his lack of experience in financial matters.

Shahrol, who became the first 1MDB CEO and served from 2009 to 2013, says that he now sees that this could be a possibility given the hindsight of the situation.

Shafee: Now that you took some time to explain to us that you have no experience in financial matters and that you have told this to Low, I want to ask you a very honest question. Do you think that was the reason why Low appointed you, so he could take you by the ear?

Shahrol: At the time, I didn’t think so.

Shafee: (How about) now with the hindsight?

Shahrol: There is a possibility.

10am: Jho Low claimed that a representative of Tuanku Mizan Zainal Abidin had raised an issue about his involvement with TIA in 2009 due to a political tussle between the Terengganu state and the federal government, Shahrol tells the court.

Shahrol says this was the reason given by Low when asked about the matter.

“It was explained by Low as a political fight between state and federal,” Shahrol testifies under cross-examination by Shafee.

10.07am: Shahrol says Terengganu palace officials had questioned Low’s position. He says the relationship between the royalty and Low had soured.

10.08am: Shafee suggests Low knew the Terengganu sultan way before Najib knew of him.

Shahrol says in retrospect, he knows.

10.40am: Jho Low was very particular on using expensive Conqueror paper for a letter to then finance minister Najib in 2009, the court hears.

Shahrol confirms this during cross-examination by Shafee.

Shafee is referring to a letter from the TIA to Najib dated March 27, 2009, to obtain approval for a guarantee for the TIA issuance of RM5 billion in bonds.

“He (Low) was very particular on using Conqueror paper…expensive stuff,” Shahrol says.

10.55am: Court is in recess.

11.30am: Court is in session.

11.42am: Shafee asks about Najib’s involvement in the initial stages of the TIA.

11.50am: The court hears that 1MDB board of directors never had a lawyer on board after the one tasked for its setup left in 2009.

Shahrol testifies that most of 1MDB board members came from an accounting background.

He says the only lawyer the board had was Christopher Lee, who was 1MDB’s promoter director.

According to Shahrol, Lee was only onboard for the setup of 1MDB until it got the “real” directors to come in.

The lawyer officially resigned as a 1MDB director on March 23, 2009, which was the same day that Shahrol and Ismee Ismail were appointed to the board.

Shahrol says they never had a lawyer on board since.

12.13pm: Shahrol agrees with the defence that records did not show then finance minister Najib benefited from the greenlight on government guarantee for TIA’s RM5 billion bond issuance.

The witness agrees with Shafee during cross-examination over the Finance Ministry memorandum recommending government guarantee for the bond issuance in 2009.

Shafee is showing Shahrol the memorandum which was presented and agreed to in a cabinet meeting in 2009.

The cabinet was headed by then prime minister Abdullah Ahmad Badawi.

Shafee: There is no personal benefit to Najib as finance minister to do the memorandum for the cabinet?

Shahrol: Based on records.

12.30pm: The court is going through documents related to TIA formation.

12.41pm: The court breaks early for lunch.

3.07pm: Proceedings resume after the lunch break, with Shahrol seen in the witness stand ready to resume cross-examination by Shafee.

3.20pm: Shahrol agrees that the federal government had acted responsibly in giving its guarantee to TIA’s RM5 billion bonds in 2009.

Shahrol testifies this based on a letter which showed the state government agreeing to a series of conditions required by the federal government for the latter to gives its guarantee.

Among the conditions agreed between the state and federal governments were that TIA cannot pass a resolution for its own winding up.

The state government has to ensure that TIA is in a financial condition that would not jeopardise its obligations under the Islamic medium-term notes; and for the state to inform the federal government any situation deemed to be prejudicial to TIA.

Shafee: You will notice from these conditions, the federal government acted very responsibly. They say if you want a guarantee, you provide these considerations.

Shahrol: Yes.

Shafee: That was locked in between the federal government and state.

Shahrol: Correct.

3.21pm: Shafee asks Shahrol if he ever met Najib prior to his appointment at TIA.

Shahrol says no.

Shafee: You agree that Najib never appointed you as CEO?

Shahrol: Yes, initially.

3.40pm: Shafee is asking Shahrol about TIA’s documents and accounts.

Justice Sequerah cuts in and asks for the point of the questions. Shafee says he is trying to establish the exact moment when the Terengganu government and the federal government had fallen out over TIA.

4.10pm: Shahrol testifies that he never knew that it was Jho Low’s company that became a secondary subscriber of 1MDB bonds in 2009.

The former 1MDB CEO says he only knew about this from the media and when he was questioned by police last year.

Shahrol testifies that he was asked by police investigators if he knew about a company called Aktis Singapore Pvt Ltd, before subsequently being told that its beneficiary was Low.

According to Shafee’s cross-examination on Shahrol, Aktis Singapore had entered into an agreement with Ambank to be the secondary subscriber of 1MDB Islamic medium-term notes on May 18, 2009.

The company subscribed to a total of RM700 million nominal value of 1MDB bonds through the bank.

It had earlier been established that Ambank Group through its AmInvestment Bank was the primary subscriber of 1MDB’s bonds for up to RM5 billion nominal value.

Shahrol agrees that it came as a shock to him when he learnt that Low’s company had subscribed to the bonds.

He also agrees to a suggestion by Shafee that Ambank should have known that the company was linked to Low.

Shafee: Low is a secondary subscriber. That came to you as a shock?

Shahrol: Yes.

Shafee: Without TIA knowledge, he was making a lot of money under the nose of TIA.

Shahrol: Under the nose of Ambank actually.

Shafee: Not Ambank. Ambank knew this. Without TIA knowledge.

Shahrol: Oh yes.

Shafee: Ambank conspired basically with Low. Without TIA knowing.

Shahrol: Correct.

4.25pm: Shahrol has never seen Jho Low sign documents before him in all the years they knew each other, the court hears.

This is revealed by the witness during cross-examination by Shafee.