State investor 1Malaysia Development Bhd was already severely in debt in March 2013 when it decided to raise US$3 billion to finance the Tun Razak Exchange project, the high court heard today.
This was revealed by former 1MDB chief executive Shahrol Azral Ibrahim Halmi during cross-examination by Najib Razak’s lawyer, Wan Aizuddin Wan Mohamad, in the former prime minister’s graft trial.
Shahrol said 1MDB was RM10 billion in debt at the time and its board did not agree to another loan but went ahead with it after it was pushed through by financier Low Taek Jho, better known as Jho Low.
Wan Aizuddin: How much debt was 1MDB carrying at that time?
Shahrol: I am not sure. I can say with certainty, (1MDB) was already heavily indebted.
Wan Aizuddin: Would you agree 1MDB realised that to get another loan or to issue another note would be difficult?
Shahrol: I agree.
Wan Aizuddin: Wasn’t the board of directors concerned? Despite being so heavily indebted, they still wanted to borrow US$3 billion?
The witness said the deal with Aabar Investments PJS Ltd (Aabar BVI) was pushed through despite the debt because of Low’s involvement.
It later emerged that Aabar BVI was a shell company registered in the British Virgin Islands and controlled by the fugitive businessman, and not an actual subsidiary of International Petroleum Investment Company (IPIC), which should have received the funds.
The joint venture between Aabar BVI and 1MDB ended up not materialising but was used by the sovereign wealth fund to raise its third bond, arranged by Goldman Sachs, totalling US$3 billion.
Sharol said Low had a habit of forming shell companies with similar-sounding names as established firms to deceive investors.
He said Low insisted that the Malaysian Abu Dhabi Investment Company (Madic) name be changed to Abu Dhabi Malaysian Investment Company Ltd (Admic).
“I can tell you what was represented to me by Jho Low. He came to me and said the Abu Dhabi guys were sensitive as Malaysia came first in the name (Madic). So, I agreed to change it.”
The company later came to be known as Admic, a famous collaboration between UK’s Sky Broadcasting and Emirati politician Sheikh Mansour Zayed Al Nahyan.
Wan Aizuddin: I am suggesting that the change of name to Admic was for the purpose of confusing people, to show that the joint venture for Admic could be Admic Inc in Abu Dhabi?
Shahrol: No comment on that.
Wan Aizuddin: Would you also agree that Jho Low was always in the habit of incorporating offshore companies that have similar names as well-established companies?
Shahrol: Agree.
Low had set up Aabar BVI, mirroring an actual subsidiary of IPIC, as well as Blackstone Asia Real Estate Partners, a shell company seemingly linked to major real estate private equity firm Blackstone Real Estate.
Shahrol said Low got his way with the companies as he was Najib’s confidant.
The former prime minister is being tried on four counts of power abuse to enrich himself and 21 counts of money-laundering involving RM2.3 billion in 1MDB funds.
The trial before judge Collin Lawrence Sequerah continues tomorrow. – TMI
Earlier reports:
Aug 4, Najib’s 1MDB Trial: Day 42
Aug 3, Najib’s 1MDB Trial: Day 41
Jul 17, Najib’s 1MDB Trial: Set to Last Until at Least June 2021
Jul 16, Najib’s 1MDB Trial: Day 39
Jul 15, Najib’s 1MDB Trial: Day 38
Jul 1, Najib’s 1MDB Trial: Day 37
Jun 30, Najib’s 1MDB Trial: Day 36
May 21, Najib’s 1MDB Trial: Day 35
May 21, Najib’s 1MDB Trial: Day 34
May 19, Najib’s 1MDB Trial: Day 33
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
Nov 4, 1MDB Trial: Judge Reprimands Najib After Tg Piai Trip
Oct 31, Najib Calls in Sick with Swollen Eyes, 1MDB Trial Postponed Yet Again
Oct 30, Najib’s 1MDB Trial: Day 27
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
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 7, Some Umno People Envious of Jho Low-Najib Ties, Court Told
Oct 1, Najib’s 1MDB Trial: Day 16
Oct 1, Arul Kanda Told Ex-1MDB CEO to Leave Country to Avoid PAC Meeting
Oct 1, Ex-1MDB CEO Paid RM99K Monthly, RM1.5M Bonus
Oct 1, Jho Low Helped Plan Abu Dhabi Crown Prince’s Trip to Sway Voters for GE13
Sept 30, Najib’s 1MDB Trial: Day 15
Sept 30, Witness: Najib Used 1MDB to Raise Funds for GE13
Sept 26, Najib’s 1MDB Trial: Day 14
Sept 26, Jho Low, Tim Leissner Played “Matchmaker” for Najib to Meet Goldman Sachs
Sept 26, US$9M Transferred from Jho Low’s Good Star to Riza Aziz’s Red Granite Pictures
Sept 26, Jho Low, Najib Faked Meeting Minutes to Move US$750M from 1MDB to PSI
Sept 26, Najib Agreed to 1MDB Borrowing RM3B from SOCSO to Lend to PetroSaudi
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 18, Najib’s Ex-Aide Led MACC to Raid on Jho Low’s Apartment
Sept 18, Najib’s 1MDB Trial Halted Briefly for Najib to See Eye Specialist
Sept 17, Najib’s 1MDB Trial: Day Eight
Sept 17, Witness Identifies Riza Aziz, Arul Kanda and Five Others as Key Players in 1MDB Saga
Sept 17, Bono, Queen of Jordan, Rosmah Floated as Trustees for TIA
Sept 17, Witness Says 1MDB Najib’s Baby, Defence Claims It Was Terengganu Sultan’s Idea
Sept 11, Najib’s Eye Infection Halts 1MDB Trial
Sept 10, Najib’s 1MDB Trial: Day Six
Sept 10, Rosmah Fond of Jho Low
Sept 10, Najib’s Ex-Aide: Jho Low Provided Scripted Responses to Deny His Involvement in 1MDB
Sept 10, Istana Negara Questioned Jho Low’s Role in 1MDB Predecessor TIA
Sept 5, Najib’s 1MDB Trial: Day Five
Sept 5, 1MDB Trial: Judge Raps Shafee over Najib’s Tardiness
Sept 5, 1MDB Trial: Najib’s Ex-Aide Took US$200K Loan from Jho Low to Buy Property
Sept 5, 1MDB Trial: Najib’s Ex-Aide Accused of Lying
Sept 4, Najib’s 1MDB Trial: Day Four
Sept 4, Najib’s Ex-Aide: Mudabala CEO Was Promised All Sorts of Things
Sept 4, Najib’s Ex-Aide, Jho Low on “Secret China Mission” to Bail Out 1MDB
Sept 4, Jho Low Ordered Najib’s Ex-Aides to Open Overseas Bank Accounts
Sept 3, Najib’s 1MDB Trial: Day Three
Sept 3, Najib’s Ex-Aide: Jho Low Drew Out Wealth Fund Concept on Kitchen Whiteboard
Sept 3, Jho Low Gave Possibly Forged Letters from Saudi Arabia to Stop 1MDB Probe
Sept 3, Only Najib and Jho Low Knew “Full Picture” of 1MDB Plan
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, Shafee: Prove Najib Knew Arab Donation Letter Faked, Jho Low Is Najib’s Alter Ego
Aug 28, Najib’s 1MDB Trial: Shafee Again Questions Sri Ram’s Appointment
Aug 28, Najib’s 1MDB Trial: Gopal Sri Ram’s Full Opening Statement
Aug 28, Najib’s 1MDB Trial: Prosecution to Show Saudi Donations a Sham
Aug 28, Najib’s 1 MDB Trial: Prosecution to Prove Jho Low Was Najib’s Alter Ego
Aug 28, Najib’s 1MDB Trial Begins
