Jho Low said 1MDB-PSI deal was “a friend helping a friend”.
9.35am: The accused Najib Abdul Razak enters the court and takes a seat in the front row of the public gallery to await the start of proceedings.
Also seen in court is his lead counsel Muhammad Shafee Abdullah and other members of the defence team, as well as lead prosecutor Gopal Sri Ram and other members of the prosecution team.
9.40am: Najib enters the dock as proceedings begin.
9.42am: Shafee informs the court that Najib was absent yesterday as he was slotted with seven Barisan Nasional MPs to speak in parliament from 11am to noon.
“He (Najib) was slotted with the rest of seven BN (MPs) to speak yesterday between 11am and 12pm. His slot was initially 11.30am to 12pm.
“This was (earlier) confirmed yesterday. The speaker Mohamad Ariff Md Yusoff was told in no uncertain terms the importance of it.
“But out of the blue Anwar Ibrahim’s slot, which was nowhere (sic), was suddenly put in place of my client’s (slot),” Shafee explains.
On Monday, Shafee had applied for the next day’s proceedings to begin around 2.30pm due to Najib needing to go to Parliament.
However, trial proceedings had to be postponed on Tuesday as the former premier was at Parliament awaiting his turn to give a speech, which had been pushed to 3pm from the morning.
As the dock remained empty yesterday, the defence counsel had explained to the court that his client’s morning slot in Parliament had been given to someone else, pushing his slot to 3pm instead.
It is reported that Anwar has denied taking Najib’s slot in Parliament.
Shafee will now resume his cross-examination of former 1MDB CEO and ninth witness Shahrol Azral Ibrahim Halmi.
9.44am: Shafee refers to a letter from AmInvestment to 1MDB dated April 3, 2009.
9.48am: Shahrol says the letter was to confirm the bank as principal adviser and lead arranger for the Islamic medium-term notes programme, which sought to raise RM5 billion for the Terengganu Investment Authority.
The witness says he signed a confirmation letter on April 6, 2009, agreeing to hire the bank and to the terms of engagement.
9.58am: Shafee asks the witness if he received legal advice on the agreement.
The witness replies, yes.
9:59am: Shafee says one of the terms was RM500,000 compensation for AmInvestment in the event the agreement was terminated for any reason.
10.10am: Shahrol says that on May 22, 2009, the Terengganu Investment Authority (TIA) board of directors came to know of a resolution to suspend the bonds’ issuance and that on May 27, 2009, the shareholders came to know of the same.
10:15am: Shafee remarks that the bonds’ issuance proceeded anyway even though the penalty for not doing so was merely RM500,000.
Shahrol earlier testified that he met the then Yang Di-Pertuan Agong Sultan Mizan Zainal Abidin, who expressed his displeasure over the bonds’ issuance. On May 27, 2009, an agreement with AmInvestment was signed to proceed with the bonds’ issuance.
10.17am: Shahrol says Sultan Mizan’s sister Tengku Rahimah Almarhum Sultan Mahmud resigned from the board on May 27, 2009.
10.30am: While cross-examining Shahrol, Shafee shows a letter signed by PetroSaudi International (PSI) CEO Tarek Obaid regarding the joint venture.
It includes an offer by PSI to put US$2 billion worth of assets into their joint venture, but for it only to be considered as US$1.5 billion, whereby the US$500 million difference would go towards increasing 1MDB’s US$1 billion share.
Shahrol then agrees to a suggestion by Shafee that this was an expression of purported generosity by PSI to 1MDB.
10.38am: This deal was to enable 1MDB to obtain a 40% stake in the joint venture project, says Shafee.
The joint venture was into the energy sector.
10.39am: PSI required that a joint venture agreement be signed on or before September 28, 2009, Shafee says, referring to a proposal letter.
10.41am: Shafee asks Shahrol what were the ‘prized assets’ mentioned in the letter.
The witness says he was not aware what the ‘prized assets’ were.
Shafee: Weren’t you excited?
Shahrol: This was a deal being discussed between the two countries, seemingly between King Abdullah and Datuk Seri Najib. I was focused on getting the task done. I was indifferent to the ‘prized assets’.
10.46am: Shafee asks Shahrol if he was certain there would be no undercutting or cheating.
The witness replies, yes.
Shafee: You assume that governments won’t cheat?
Shahrol: This was represented to me as something personal between Datuk Seri Najib and the king (Abdullah).
Shafee: Did you mean that Datuk Seri Najib’s personal relationship with the head of government of Saudi Arabia, would assist 1MDB’s venture with PSI?
Shahrol: I would go a step further to say that the 1MDB-PSI joint venture was created by this personal relationship.
Shafee: Who told you that?
Shahrol: Jho (Low Taek Jho).
Shafee: He learnt this from where?
Shahrol: He was there apparently on the meeting on the yacht. He mentioned he was there at a discussion for a meeting on a yacht on one of the holidays.
Shahrol was referring to his previous testimony of an August 2009 meeting between Najib and PSI co-founder Prince Turki, on board a yacht in southern France. Low was also present.
10.57am: Shafee asks whether due diligence took priority over meeting the September 28 deadline.
Shahrol says the objective was to meet the target date and to complete the documentation.
Shafee: Can you tell me what was the hurry?
Shahrol: The mandate was given to us to get it done by September 28.
Shafee: We are going around in circles. It may sound flippant, but I am asking a serious question. What is the hurry to get it done by September 28?
Shahrol: What was impressed upon me was that there would be a royal visit.
Shafee: Jho Low told you?
Shafee: You have to sign it on the state visit?
Shahrol: What was told to me was that the crown prince was supposed to come and that it was supposed to be witnessed by the crown prince.
Shafee points out that that the royal visit reason was not mentioned in any documentation.
10.58am: Judge Collin Lawrence Sequerah allows a break.
11.26am: Hearing resumes.
11.27am: Shafee refers to a letter from Ernst & Young, a third-party auditor hired by 1MDB in September, 2009.
Shahrol says 1MDB investment and finance executive director Casey Tang said the firm was hired not only to offer an opinion on tax issues but also to provide an accounting treatment for the deal.
11.50am: The court hears that 1MDB board of directors was informed in 2009 that PSI was owned by Saudi’s King Abdullah and hence the Saudi royal family.
According to Shahrol, it was the company’s then-executive director Casey Tang who made the representation to the board during a special board meeting on Sept 18, 2009.
Shahrol tells the court that the special board meeting was called with primary objective to deliberate and decide whether 1MDB should continue with its Project Aria, which is a joint venture with PSI.
Shahrol says he believed that Tang could have gotten the idea that PSI was owned by the Saudi royal family from then PSI directors, Tarek Obaid and Patrick Mahoney.
Shahrol adds that he believed that this was supported by Jho Low, and Tang had believed it as true.
Under cross-examination by Shafee, Shahrol testifies that he also believed what Tang had said about the ownership of PSI then.
11.51am: Shahrol says the crown prince of Saudi Arabia never did turn up to witness an inking of a deal between PSI and 1MDB.
12.07pm: Shafee goes over the minutes of a 1MDB special board meeting on September 18, 2009, which discussed the details of the joint venture.
12.12pm: There was only oral due diligence done on PSI before its joint venture with 1MDB, the court hears.
Shahrol testifies that the due diligence done on PSI was not put down on paper or even presented to the fund’s board.
During cross-examination, Shafee tells Shahrol that even in government to government deals, there is still need for due diligence.
Shafee: Was there due diligence and this is encompassed on paper?
Shahrol: There was no paper.
Shafee: Oral due diligence?
Shahrol: Yes. It was not produced to the board.
Shafee: Not reproduced on paper?
12.20pm: Shahrol tells the court the reasons why the company had allowed PSI to appoint the asset valuer for assets that the latter would inject into their joint-venture vehicle company.
He says that among the reasons included the fact that the joint-venture was a government-to-government (G2G) deal.
Under cross-examination by Shafee, he testifies that he took PSI as a trustworthy partner then.
Shafee: This asset supposed to be injected by PSI, asset to be put by PSI. You agree with me, have to take due diligence to determine the veracity and credibility of the assets and their value?
Shahrol: We take it as a mandate for us to execute a G2G deal. Now my state of mind at that time was that PSI was a trustworthy partner, and when they said they represent and guarantee the value of the asset, that is good enough for us to proceed.
Shafee: Do you agree, professionals like you were to ensure that 1MDB did not get short-changed in the deal?
Shahrol: Within the parameters, yes.
Shafee: Do you agree that despite meeting the Arab leaders, the hugs and kisses with the Arabs, that your job was to protect 1MDB?
Shahrol: On that, I need to take into context with Article 117.
Shafee: Do you agree that no matter how friendly the relationship between the two countries or leaders, you were supposed to protect 1MDB?
Shahrol: I was supposed to protect 1MDB taking in mind Article 117 puts very clear mandate on how I can (accomplish) that.
12.25pm: Shahrol says as of September, 2009, he did not voice out any concerns about the 1MDB-PSI deal.
12.30pm: Shahrol testifies that Jho Low told him that the 1MDB-PSI joint venture was “a friend helping a friend”.
The 9th witness tells Shafee this during cross-examination, when the lawyer asks him about the deal.
Shafee: Low told you this deal was a friend helping a friend?
Shahrol: Low told me the deal was done on a friend helping a friend basis.
Shafee: He (Low) concluded that?
12.45pm: Court breaks for lunch.
2.38pm: Hearing resumes.
2.39pm: Shafee refers to a position paper tendered in a board meeting on September 18, 2009, jointly prepared by 1MDB investment director Kelvin Tan and 1MDB chief investment officer Vincent Goh, and later reviewed by Tang and recommended for submission by the witness.
Shahrol verifies the document.
The paper details 1MDB’s pledge to invest US$1 billion in a joint venture with PSI.
2.54pm: Shahrol agrees with the defence’s suggestion that the board has no other source of information about the joint venture other than PetroSaudi.
The lack of information extends to the nature of the so-called ‘prized assets’ to be invested in locations such as Argentina, Turkmenistan and other countries.
3.07pm: Shahrol says the Saudi government itself never verified the terms of the joint venture deal.
The 1MDB board never received annual reports from PetroSaudi. The board was also never given details about the Saudi company’s alleged previous projects in Europe, Latin America, and Central Asia.
3.16pm: Shahrol speaks of the assets supposedly owned by PetroSaudi in South America.
The witness says there were oil and gas assets in Argentina and Venezuela but cannot recall knowing more than that.
Shafee: Did you see his fingerprints here (in the joint venture deal), that Jho Low was a master manipulator? That was described by the previous witness Amhari Efendi Nazaruddin.
Shahrol: In my statement, I used the word orchestrator with slightly less negative connotations.
The part is very clear to me is that he is like a conductor in an orchestra where the different players playing their part without necessarily knowing what the other players are doing.
Shahrol also agrees to a suggestion by Shafee that he was one of those in the orchestra, who played his part without knowing what the conductor (referring to Low) wanted to do.
The lawyer then asks Shahrol if he believes there was a possibility that Najib too did not know what Low was doing.
Shafee: You would agree, Low orchestrating this. Is there a possibility the (former) PM himself wouldn’t know?
Shahrol: Based on what I have seen, there is definitely that possibility.
4.10pm: Then 1MDB chairperson Mohd Bakke Salleh had directed the company secretary not to record the telephone call from Najib during a meeting to decide whether to proceed with a 1MDB-Petro Saudi joint venture, the court hears.
During cross-examination by Shafee, Shahrol testifies that Bakke issued this directive after he received the telephone call during the meeting on Sept 26, 2009.
“I remember Bakke asked for it (telephone call) not to be recorded,” Shahrol says.
“If I recall, I even suggested the meeting be audiotaped but he (Bakke) disagreed,” Shahrol says.
4.20pm: Shafee refers to the director’s circular resolution that 1MDB participate in a joint venture via investment.
The resolution called for Shahrol and Tang to be appointed as interim directors of the joint venture company.
4.30pm: The court hears that 1MDB entered a joint venture agreement that cost the company RM1 billion in 2009, despite its then CEO noticing anomaly in the name of the partnering company.
Shahrol testifies that he noticed that the company name on the agreement document was PetroSaudi Holdings (Cayman) Ltd instead of PetroSaudi International Ltd, which 1MDB had been dealing with.
According to Shahrol, he still put his signature on the paper after having consulted then 1MDB executive director Casey Tang, who was the person in charge of managing joint venture matters for 1MDB.
“At that time, Tang explained that PetroSaudi Holdings (Cayman) was a wholly-owned subsidiary of PetroSaudi International,” Shahrol tells the court.
Agreeing that he was fully dependent on Tang’s words at that time, Shahrol also claims that he did not consult for a written opinion from 1MDB legal representative at the time, Wong and Partners, as Tang had been working with the lawyers.
“Casey (Tang) said it was okay for me to sign,” he says.
4.35pm: Shafee questions Shahrol’s reliance on Tang regarding the joint venture.
The lawyer says the joint venture agreement was ultimately signed with PetroSaudi Holdings (Cayman) Ltd instead of the PetroSaudi International.
The former is a company based in the British Virgin Islands, which prosecutors said was used to defraud the state investor.
Shahrol says he relied on Tang’s legal experience and that he commanded the confidence of the board then.
4.45pm: Judge Sequerah allows proceedings to adjourn for the day and to continue at 9.30am tomorrow.
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 1, Najib’s 1MDB Trial: Day 16
Sept 30, Najib’s 1MDB Trial: Day 15
Sept 26, Najib’s 1MDB Trial: Day 14
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 17, Najib’s 1MDB Trial: Day Eight
Sept 10, Najib’s 1MDB Trial: Day Six
Sept 10, Rosmah Fond of Jho Low
Sept 5, Najib’s 1MDB Trial: Day Five
Sept 4, Najib’s 1MDB Trial: Day Four
Sept 3, Najib’s 1MDB Trial: Day Three
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, Najib’s 1MDB Trial Begins