DEBUNKED

Najib’s 1MDB Trial: Day 27

October 30, 2019

1506

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The court hears that PetroSaudi co-founder Tarek Obaid had shared a portion of the US$85 million he received from Jho Low’s Good Star Ltd with an associate.

Based on banking documents tendered in court, Tarek had transferred US$33 million to a bank account belonging to PetroSaudi director Patrick Mahoney on Oct 20, 2009.

10.55am: 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.

Also in court is the former prime minister’s defence team, except his lead lawyer Muhammad Shafee Abdullah, who has an earlier scheduled Federal Court matter to attend to this morning.

Also present is lead DPP Gopal Sri Ram and other DPPs.

11.12am: Shafee enters the High Court.

11.26am: Najib enters the dock as proceedings begin.

11.39am: The hearing starts with Shafee showing to the court a bank account statement that belonged to Good Star Ltd, a company that belonged to Jho Low.

According to Shafee’s cross-examination of former 1MDB CEO Shahrol Azral Halmi, the RBS Coutts bank statement showed Good Star had zero balance on June 12, 2009, before it was credited with US$700 million on Sept 30, 2009.

It had been established earlier in the trial that Sept 30, 2009, was the date when 1MDB made a US$700 million payment to an RBS Coutts account, which was supposedly meant for PetroSaudi.

Shahrol is then shown a bank statement that belonged to Tarek Obaid’s JP Morgan account, which showed that the PetroSaudi International (PSI) co-founder received US$85 million from Good Star.

This transfer from Good Star to Tarek occurred on Oct 5, 2009, which was five days after Good Star received the 1MDB monies.

11.47pm: PSI director Tarek Obaid was paid US$85 million out of the US$700 million allegedly diverted from the 1MDB-PetroSaudi joint venture as commission for the said deal, Shahrol testifies.

He says this when shown a JP Morgan bank statement by Shafee during cross-examination today.

Shafee (Reading out from the bank statement): Tarek Obaid was paid US$85 million out of US$700 million as commission received by a client for a joint venture deal.

Shahrol: Yes. The JV is the 1MDB-Petrosaudi deal.

Shafee: Our money of US$700 million went there, US$85 million to Tarek Obaid to swipe as purported commission?

Shahrol: Yes.

Shafee: Is this a bona fide commission or outright stealing?

Shahrol: There’s not enough information to tell.

Shahrol agrees with the defence counsel that the US$85 million constitutes more than 10 per cent of the US$700 million and that it is quite high for a commission for the deal.

12pm: The court hears that PetroSaudi co-founder Tarek Obaid had shared a portion of the US$85 million he received from Jho Low’s Good Star Ltd with an associate.

Based on banking documents tendered in court, Tarek had transferred US$33 million to a bank account belonging to PetroSaudi director Patrick Mahoney on Oct 20, 2009.

This was about two weeks after Tarek received US$85 million from Good Star, which earlier received US$700 million from 1MDB.

Shahrol agrees with Shafee that this showed that Tarek was splitting the money he received from Good Star with Mahoney.

Shafee: So, he (Tarek) received US$85 million, then he shared with Patrick US$33 million.

Shahrol: Yes.

Shafee: Christmas came a bit early that year.

The witness testifies that he, however, did not know anything about the payment that Tarek and Mahoney received.

12pm: The court hears that White and Case, the solicitors for the joint venture deal, were paid £127,000 by Tarek.

Shahrol says the payment to the lawyers should have been made by PSI.

Shafee: Is it now possible to say Tarek paid them because he had a legal interest?

Shahrol replies that it is possible.

12.04pm: What happened to the US$700 million, asks Shafee.

Shahrol says the money was “transferred to Good Star”.

“The PSI side, represented by Tarek, confirmed that PSI had received the US$700 million. We didn’t know that it went to Jho Low’s Good Star. We thought it was accounted for in PSI.”

12.07pm: Shahrol says he had tried to get confirmation via email that the remaining US$300 million had gone into PSI but did not get a reply.

12.08pm: He says the US$700 million was supposed to go into an account belonging to a PSI subsidiary, but “there was no black and white” as to where the money went.

At the time, he says, the 1MDB board of directors did not know that the money had gone into Good Star.

He adds that the board then asked him to seek Najib’s advice on the matter.

Shafee: Were you able to inspect if the money went into either PSI or the joint-venture company?

Shahrol: No. We tried to get to the account for the 1MDB joint venture company but we were unable to do so. We were getting stonewalled by Patrick Mahoney and (Tarek) Obaid.

Shafee: When was this stonewalling?

Shahrol: Between end-2009 and early 2010, before the Murabaha deal.

Shafee: You were a (1MDB) director. Were you physically prevented?

Shahrol: We submitted email requests but a lot of excuses were given, and the information not provided. I tried to go through Jho (Low) which resulted in the proposal of the Murabaha notes.

12.14pm: Shahrol says the situation did not arouse his suspicion. Shafee suggests that a reasonable person should have been suspicious.

Shafee: You’re either suspicious, or you’re in on the whole deal.

Shahrol: I disagree.

12.33pm: Shafee says Shahrol wilfully covered his eyes because he didn’t want to see that the deals were a sham.

In March 2010, 1MDB’s board of directors agreed to a US$1.5 billion loan to PetroSaudi Holdings (Cayman) Ltd (PSI Cayman), which used to be the sovereign wealth fund’s partner in a joint venture, the court hears.

This was despite PSI Cayman not being able to pay US$1.2 billion to 1MDB as reimbursement when they parted ways several months earlier.

Shahrol testifies that the company’s board of directors had approved to lend PSI Cayman the US$1.5 billion through a directors’ circular resolution dated March 22, 2010.

Asked by Shafee if this made sense to him then, the witness says that he did not question much at the point in time as he saw the joint-venture matters as being part of government-to-government deals.

1pm: The trial adjourns earlier today as High Court judge Collin Lawrence Sequerah has a matter to attend to this afternoon.

Before Sequerah allows proceedings to adjourn today, Shafee informs the court that tomorrow he has a Federal Court appeal to attend.

The judge then also allows Shafee’s application for proceedings tomorrow to begin at 2.30pm instead of 9.30am.

Earlier reports:

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