DEBUNKED

Najib’s 1MDB Trial: Day 33

May 19, 2020

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After numerous postponements, the 33rd day of former prime minister Najib Abdul Razak’s trial on the RM2.28 billion 1MDB case resumed this afternoon.

Among the reasons for postponements were witness former 1MDB CEO Shahrol Azral Ibrahim Halmi and defence lawyer Muhammad Shafee Abdullah being on medical leave; Shafee needing to help prepare for his son’s wedding; Shafee and the rest of the defence team going under self-imposed quarantine linked to the Covid-19 pandemic; the imposition of the MCO on March 18; and Najib needing to attend the single-day Parliament sitting on May 18.

The accused’s trial, of over 21 money laundering charges and four abuse of power charges involving RM2.28 billion of 1MDB funds, is fixed before Kuala Lumpur High Court judge Collin Lawrence Sequerah at 2pm today.

Proceedings are expected to resume with the defence continuing cross-examination of Shahrol, the ninth prosecution witness.

The last time that Shahrol gave oral evidence while under cross-examination was on Nov 11 last year.

1.30pm: Members of the media start entering the courtroom to take their seats, which had been rearranged to comply with the Health Ministry’s guidelines for Covid-19 prevention.

DPP Ahmad Akram Gharib is also seen in the courtroom to fix seating for lead DPP Gopal Sri Ram and other members of their team.

Meanwhile, the Kuala Lumpur Courts Complex management has also opened two videolink rooms for journalists to monitor the trial through a live feed.

1.56pm: Shafee enters the High Court, joining other members of Najib’s defence team.

1.59pm: Najib enters the High Court. He takes a seat at the front row of the public gallery to await proceedings to begin.

2.15pm: Najib enters the dock as the proceedings begin.

2.16pm: DPP Gopal Sri Ram informs the court that the prosecution will seek a contempt proceeding against Najib over an article.

Sri Ram says it is because the article quoting Najib contained a very serious allegation that the ongoing RM2.28 billion trial is unfair.

On March 4, Reuters reported Najib as saying he expects an atmosphere more conducive to a fair trial, following the change in government from Pakatan Harapan to Perikatan Nasional.

During proceedings, Shafee asks the prosecution to reconsider its move to seek contempt.

Shafee explains that, after consulting with Najib, what his client said in the Reuters article was not meant to imply that the present court had ever been unfair in the 1MDB proceedings.

2.20pm: Riza Aziz has indicated his readiness to give evidence in his stepfather Najib Abdul Razak’s RM2.28 billion 1MDB trial, the High Court hears.

Sri Ram says that the prosecution may need to revise the witness list as a result.

2.35pm: Sri Ram and Shafee seek to have more counsels allowed in court, to enable their teams to function well in the trial.

However, Justice Sequerah says that he could only allow one more from each team given the circumstances of the Covid-19 pandemic.

It is learned that for the time being, only the lead counsel for each team and two other members are allowed to be in the courtroom at one time.

Shafee also suggests to the court to have reporters and lawyers who are watching the trial to be shifted to another courtroom where they can witness it through a live feed.

“(They) can be next door. Priority should be given to counsels,” says Shafee.

Sri Ram had earlier given similar arguments as well, saying that he needed more members of his team inside for a smooth operation.

However, the High Court judge put his foot down and said that he will consider the counsels’ request, but for now he would only allow one more from each team.

The court then allows a short break as the defence needs to retrieve documents for the trial and Shafee wants to arrange members of his team to assist him inside in cross-examination of Shahrol.

3pm: Proceedings resume after a short break.

3.07pm: Shahrol resumes cross-examination by Shafee.

3.20pm: Shahrol testifies that the company decided to shorten the service contract of auditor Ernst and Young (EY) due to a disagreement on how to value joint-venture assets that 1MDB had with Petrosaudi.

The prosecution witness says that there was a proposal then to replace EY with another audit firm, KPMG.

However, Shahrol says he cannot recall whose idea it was for 1MDB to engage KPMG but does not dismiss the possibility that this could have come from businessperson Jho Low.

3.26pm: Shahrol agrees that the absence of the necessary documents relating to the JV assets worth US$1 billion was the source of uneasiness between 1MDB and EY.

Shafee: But you were a director of the JV. You are entitled to the document, by law.

Shahrol: Yes.

Shafee: Despite that, you were deprived of it.

Shahrol: Yes.

Shafee: Didn’t you suspect there was something not right?

Shahrol: At the time, no. The impression I had was that it was more of a deal between Tarek, Prince Turki and Datuk Seri Najib. I was just a cog in the machinery. I wasn’t involved in the decision making.

Shahrol adds that he brought this matter up to Low to see whether there was anything that could be done from the government-to-government side of things.

3.45pm: Shahrol tells the court that the company’s board of directors were instructed to be careful in recording their meetings so as to not jeopardise the then prime minister.

“If I may, throughout my tenure from 2009 to 2013, members of the board and I were under this pervasive deal that we must be careful on what we minute, or else we will be turned against our main shareholder Najib,” he says.

Shahrol says this during cross-examination by Shafee.

This comes as the defence presses Shahrol on the minutes of a meeting in July 2010. Shahrol had allegedly failed to give a clear picture at the meeting on why EY had been delaying to sign off its audit on the company then.

“It wasn’t minuted, but yes I insisted, and yes it was discussed. There was a good reason.

“The phrasing was ‘mesti (must) protect PM’,” says Shahrol.

According to the witness, they had been ordered not to give extra ammunition for political attacks, hence the order to be careful on what they put on meeting records.

3.51pm: Shafee says that instead of resolving the matter back in 2010, he suggests that Shahrol, being CEO, had decided to sweep everything under the carpet by changing the auditors.

Shahrol: Disagree.

Shafee: This new auditor signed off. How? They did not get the documents.

Shahrol: Correct.

Shafee: Because they used a different basis. Instead of recognising it [the investment] as equity, they said [it was] murabahah [notes].

Shahrol: Yes.

4.01pm: Shafee asks the witness what kind of government-to-government (G2G) deal this was, given that PSI never gave them the necessary documents.

“The genesis of this cooperation was personal, between Datuk Seri Najib and King Abdullah [of Saudi Arabia]. That was what was informed to me and there were pictures shown to me. I didn’t have any reason to doubt that it was a G2G relationship.

“When we asked for the accounts of the JV company, I understood that it was more of a courtesy for them to provide it to us as we were no longer shareholders,” he says.

4.20pm: Shafee asks the witness whether the accounts were closed just before FRS 139 was enforced – which the lawyer suggests was a higher auditing standard – to avoid being subject to stricter regulations.

Shahrol says he cannot comment on whether it is a higher or lower standard, as he is not an accountant.

Shafee: I put it to you that this message shows that the company was avoiding FRS 139 as it was more stringent.

Shahrol: I can’t comment on that.

4.30pm: Shafee asks why the murabahah notes were again converted back to equity later on, when 1MDB wanted to repatriate its money, saying that it was odd.

Shahrol says it is not that odd as the conversion was one of the options to repatriate the money, as the equity can be sold to third parties.

He says that the conversion came as a result of discussions between himself and Jho Low.

4.37pm: Judge Sequerah allows the defence’s application for the proceedings on Friday to be postponed.

Shafee tells the court that this is because he has to attend a separate court matter in Shah Alam on that day.

Shafee is referring to the murder trial of Cradle Fund CEO Nazrin Hassan.

Proceedings then adjourn for the day and will resume around 9.30am tomorrow.

Earlier reports:

Nov 11, Najib’s 1MDB Trial: Day 32

Nov 7, Najib’s 1MDB Trial: Day 31

Nov 6, Najib’s 1MDB Trial: Day 30

Nov 5, Najib’s 1MDB Trial: Day 30

Nov 4, Najib’s 1MDB Trial: Day 28