Najib has the ultimate power in 1MDB.
9.30am: Accused Najib Abdul Razak enters the High Court and takes a seat at the front row of the public gallery to await proceedings to begin.
The former prime minister is seen conferring with his lead defence counsel Muhammad Shafee Abdullah.
Also seen in court are lead DPP Gopal Sri Ram and other members of the defence team, as well as former 1MDB CEO Shahrol Azral Ibrahim Halmi, who is sitting in the witness box.
9.36am: Najib enters court as proceedings begin.
9.59am: Shafee is walking Shahrol through the hiring process of Casey Tang as 1MDB executive director.
Shafee suggests that the board of directors of 1MDB were given ultimate power to run the business despite there being shareholders in the company.
10.02am: 1MDB still have the ultimate power to run the company despite the three amendments to its memorandum and articles of association (M&A), which included the insertion of Article 117, the court hears.
Shahrol agrees to this assertion from Shafee during cross-examination.
Shafee: You notice that and agree that despite the three amendments (to 1MDB’s M&A), the board (was) still given the ultimate power to run the company without shareholder (approval)?
Article 117 of 1MDB grants Najib wide powers as chairperson of the fund’s board of advisors.
10.08am: Jho Low proposed for the insertion of Article 117 into 1MDB’s Memorandum and Articles of Association (M&A), the court hears.
Shahrol testifies that Article 117 was similar to the sovereign wealth fund’s predecessor Terengganu Investment Authority (TIA) Article 9(a).
Shahrol says the amendment was also done on the advice of among others, lawyers Wong and Partners.
“For the amendment, the context on replacing the “federal government” (in Article 9(a)) with “prime minister” (in Article 117) came from Jho (Low). This is what Najib wanted to make it unambiguous,” Shahrol says.
When Shafee asks whether the witness had ever clarified with Najib if this was what the then prime minister wanted, Shahrol admits he did not specifically do so.
10.15am: Court takes a short break as Shafee tells Judge Collin Lawrence Sequerah that his team had left a box of documents either in the car or at their office.
Sequerah allows it and requests that Shafee sees him in his chambers.
11.08am: Court is in session.
11.10am: During the cross-examination on Shahrol, Shafee tells the witness to compare Section 56 of the Iskandar Regional Development Authority (IRDA) Act and Article 117 of the 1MDB memorandum and article of association (1MDB M&A).
Shafee then puts to Shahrol that while the two provisions are not identical, they are more or less the same.
It is understood that the defence is trying to establish whether Article 117 of 1MDB M&A is the first of its kind, and compare it to the IRDA Act, which was enacted in 2007.
For the record, Article 117 of 1MDB M&A stipulates that amendments to the M&A as well as the appointment or removal of directors, and any financial commitments must be approved by the prime minister.
The witness, however, testifies that he cannot see the two provisions as the same.
“Honestly, I’m struggling to see that (similarities). Because here (Section 56 of IRDA Act) it says the prime minister can make changes (to provisions in the act) after consultation with state authority.
“But here (Article 117 of 1MDB M&A) it says you cannot make changes to the M&A without approval from the PM.”
11.25am: Shahrol agrees with the defence that Najib’s far-reaching powers, as seen in Article 117 of the sovereign wealth fund’s Memorandum and Articles of Association (M&A), is not uncommon.
Shafee: This kind of far-reaching power is not uncommon?
Shafee then makes reference to various Acts such as Section 3 (2) of the Petroleum Development Act 1974, which grants the prime minister power to issue a direction to Petronas from time to time.
When Shafee submits that such powers are provided to the prime minister due to Petronas being a strategic company for the government and that 1MDB is also intended to be a strategic company, Shahrol agrees.
12.09pm: It was a problem that Najib was wearing three hats in the approval process to release confidential information on 1MDB, testifies Shahrol.
Shahrol says that this is due to Najib not only being the chairperson of 1MDB’s board of advisors but also as then prime minister and finance minister.
“The (1MDB) board of directors decide, the (1MDB) board of advisors approve and this letter (from Shahrol as then 1MDB CEO to Najib dated Dec 2009) is to formalise approval from the prime minister and finance minister.
“The problem is that the same man (Najib) wears three hats. He already endorsed it (as chairperson of 1MDB board of advisors).
“This letter is asking for his approval wearing the other two hats, as it is addressed to the prime minister and finance minister,” Shahrol says.
12.17pm: Shafee now refers a letter that Shahrol sent on December 22, 2010, to Najib in his capacity as finance minister.
Shahrol says the content was given by Low for Najib to endorse it as the finance minister.
This is under article 117 of the memorandum and articles of association for 1MDB.
12.40pm: Court is in recess.
2.41pm: Court is in session. Shahrol takes the stand.
2.45pm: Najib had signed a letter appointing Shahrol as CEO of 1MDB in 2009 not in his capacity as the then prime minister, the court hears.
According to the letter tendered as evidence, Najib had instead signed the letter in his capacity as chairperson of 1MDB board of advisers.
It had been established earlier during the trial that under 1MDB memorandum and articles of association (M&A), appointments of 1MDB top management members can only be made by the prime minister of Malaysia.
Shahrol, who is a prosecution witness in the trial, however, disagrees that this had made his appointment as the company CEO invalid.
Because it was the same person who signed it albeit, in a different capacity, the witness says.
Shahrol, however, agrees that it was important for the right hat to be worn, as he had stressed earlier during the trial.
2.53pm: Najib was informed about US$700 million transfer of monies into Jho Low-linked Good Star Limited, Shahrol testifies.
Shahrol says that Najib, as then chairperson of 1MDB board of advisors, was informed when the ex-1MDB CEO met the then prime minister at the latter’s house for a meeting on Oct 16, 2009.
Shahrol is replying to Shafee’s questioning about the nature of the meeting, which minutes are presented in court today.
The witness says Najib had then asked about the PetroSaudi International (PSI) re-evaluation of assets linked to the joint venture, among others, before signing off on the document presented to him by Shahrol.
“This was also a follow up from the (1MDB) board’s instruction to me to present to Najib the summary of what transpired shortly following the issue with PSI, in which US$700 million was transferred to Good Star.
“This was also the time when I had gone through with PSI to ask them for their input on the proposal.
“The intention here is for 1MDB to make sure the chairperson of the board of advisors is made aware and for him to sign off on the points stated in point Six (of the document) which is the agreed part.”
3pm: Najib was “the boss” whose instructions Shahrol followed, the court hears.
Shahrol testifies this when Shafee questions him on the validity of the alleged meeting between Shahrol and Najib at the latter’s house on Oct 2009.
“At that time, because Najib wore three hats, I made no distinction between which role he played.
“When he decides, the same decision applies regardless whether as prime minister, finance minister, or chairperson of the (1MDB) board of advisors. He (Najib) was the boss and I follow his instructions,” Shahrol says.
3.20pm: Shahrol tells the court that despite the terms stated in the law provisions that bind the company, the reality was that Najib held ultimate power.
Shahrol testifies this under cross-examination by Shafee, who confronts him with legal provisions that stipulate the power held by 1MDB board of directors in making decisions for the company.
“I can only testify to what had happened. And what happened at that time, to me, we consider these minutes taken and signed by Najib as instructions by the prime minister. As directors, we are duty-bound to execute his wishes.
“So that’s what happened. Whether it was in compliance with the rules, it was fair that you raised (about the law provision), but this is what happened.
“rom 2009 until 2013 when I left as CEO, I continued to see the prime minister Najib as the ultimate power in 1MDB.”
Shafee then continues to press Shahrol, saying that while the defence is not disputing the fact that Najib has the ultimate power in 1MDB, the power to make decisions still lie with the board instead of Najib.
To this, Shahrol says it was not what was always in practice in 1MDB.
Najib was the boss and I followed his instructions, says ex-1MDB CEO
3.25pm: Najib is described as “Emperor of 1MDB”, Shahrol testifies.
During cross-examination, Shahrol agrees to a question from Shafee on whether the ninth witness is trying to say that Najib was like the “Emperor of 1MDB”.
The answer comes on the heels of back and forth between Shahrol and Shafee whether the 1MDB’s board of directors or the board of advisors’ chairperson Najib had the true decision-making power.
Shafee: Are you saying the prime minister (Najib) was the ‘Emperor of 1MDB’, with no checks and balances?
Shahrol: I will say yes.
4pm: The court hears from Shahrol that he signed the minutes of a meeting in 2011 without attending it.
According to the witness, he was given the minutes of the March 30, 2011 meeting by Jho Low, who told him that Najib had agreed to it and Shahrol should sign it too.
Shahrol also agrees that there was untruth in the minutes, as it stated that he was the person who recorded the minutes.
“This was not truthful record, but I signed on the basis that I believe Jho Low was working with Najib on these matters, which Najib wanted to be executed,” he testifies.
4.05pm: The hearing is adjourned early for the day, as lead defence counsel Shafee has an eye examination appointment with his doctor.
In his request for early adjournment, Shafee tells the court that he needs to do the check-up as one of the procedures for an eye operation which he would undergo this Saturday.
Justice Collin Lawrence Sequerah then adjourns the court to 9.30am next Monday.
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 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