DEBUNKED

Najib’s 1MDB Trial: Day 48

September 14, 2020

172

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1MBD formed to fund Umno and Najib’s politics

Ex-CEO’s revelations:

1MDB fully controlled by Najib
1MDB was one of the ways used by Najib to fund Umno
CEO never allowed to question any of 1MDB’s investments
Najib pre-approved 1MDB decisions even before board can decide
Jho Low right-hand man of Najib in 1MDB
1MDB management had to take instructions from Jho Low’s proxies and sometimes do not even have access to company documents as they were controlled by Low and his team

Former 1MDB CEO Mohd Hazem Abd Rahman today testified that Jho Low had informed him that the company was set up to help fund Umno.

Reading his witness statement, he told the Kuala Lumpur High Court that Low had said so during a meeting in a hotel in Putrajaya in July 2012, in the presence of then prime minister Najib Abdul Razak’s aide, Azlin Alias.

He testified that Azlin, who died in an accident in 2015, had arranged for the introductory meeting with Low because the witness had applied to be 1MDB’s chief operating officer (COO).

“During this meeting, Jho Low informed me that the real purpose of 1MDB was to help Umno through businesses involving the company’s strategic investments.

“He did not go into details on how 1MDB would be used to help Umno. Azlin didn’t say much because the meeting was designed for me to meet Jho Low,” he said.

Hazem is the 10th prosecution witness in the graft trial against Najib.

“I wish to state here that since the time I joined 1MDB and was told by Azlin that the company was meant to protect the interest of both Najib and Umno, I had suspicions that the company’s money will be abused.

“However, I was of the opinion that the funds that were abused could be returned to the company within a certain time frame,” he said.

He explained that if the investments were properly managed, the investments would pay for the money used by Umno.

Hazem added Low told him 1MDB was fully controlled by Najib, who was then finance minister and sat on 1MDB’s board.

“Jho Low also informed me this was a company fully controlled by Najib, where any decision is under his absolute power,” he said.

He said Low explained to him 1MDB was one of the ways used by Najib to fund Umno when he was the party president as the MOF Inc-owned company was fully under his purview.

“Jho Low himself has reminded me that Najib formed 1MDB to take care of Umno funds and this was one of the methods to obtain political donations via a company supervised by the PM himself,” Hazem said.

In the portions of his witness statement read out today, Hazem did not at any point provide specific examples of how Umno purportedly benefitted from 1MDB.

Hazem took office in August 2012 and was tasked with handling 1MDB’s 13 power plants, as well as the Tun Razak Exchange and Bandar Malaysia projects.

Hazem, who was promoted to 1MDB CEO in 2013, said he was never allowed to question any of 1MDB’s investments as it was agreed on by Najib to channel money to Umno.

“I have to agree because Jho Low informed me that all funds issued through 1MDB investments overseas are for Umno interests and I cannot question that,” he said.

The foreign investments and fundraising activities were entirely handled by Jasmine Loo and Terence Geh, under Jho Low’s instructions, said Hazem.

Najib pre-approved 1MDB decisions even before board can decide

Najib, as the prime minister and finance minister, would sign off the shareholder resolution of 1MDB even before the company’s board of directors could make a decision on a matter.

Hazem said the fact that Najib signed off on decisions crafted by Low and his team, even before they were made by the board, led him to believe that Low represented Najib.

Explaining Low’s control of 1MDB, Hazem said he would be provided talking points by Low which he was then tasked to present to the 1MDB board.

“After receiving instructions, I will carry out my job scope as CEO by presenting to the board and conduct the process of governance.

“However, what happened was that the directors’ circular resolution (DCR) would be prepared by (1MDB general counsel) Jasmine Loo and sometimes the shareholders’ resolution would also be shown even before I present to the board of directors,” he said.

“Sometimes, Najib would even sign the shareholders’ resolution before the board of directors sign off on the DCR. The shareholder resolution will be left undated and the date will be filled after the board of directors sign off on the DCR.

“This convinced me to proceed with Low’s instruction as it showed that they have been pre-approved by Najib,” he testified.

By convention, after the board of directors make a decision, it will sign the DCR. This is then followed by the shareholder resolution.

Najib, by virtue of being the finance minister, is the sole shareholder of 1MDB through the Finance Minister Incorporated.

Hazem also said that Low had planted his people, including Loo, throughout 1MDB.

He said the 1MDB management had to take instructions from Low’s proxies and sometimes do not even have access to company documents as they were controlled by Low and his team.

Hazem added that he grew worried about the workings in 1MDB, particularly in regard to funds raised by the company overseas.

He said the fundraising was put together by Low’s team with the 1MDB management having little oversight of the raised funds.

Worried at the developments, Hazem said he turned to then 1MDB chairperson Lodin Wok Kamaruddin to reach out to Najib.

“At the end of 2014, I had used Lodin to meet Najib to ask that the overseas funds be repatriated as 1MDB had to repay a bridging loan to Maybank.

“However, when Lodin returned from the meeting, he informed that Najib did not allow for the funds to be repatriated.

“Lodin and I were very dissatisfied with Najib’s response as 1MDB had no money and all the funds raised were abroad,” Hazem told the court.

He said he did not report the matter to the authorities because of his “respect” and “fear” of Najib. Hazem was also worried that his career and Finance Minister Incorporated (the sole shareholder of 1MDB) might be affected.

“If 1MDB failed to repay its debts, then the government of Malaysia will have to bear the burden, and this would affect the economy and the people of Malaysia,” he said.

Like Shahrol before him, Hazem testified that Low’s instructions were akin to receiving instructions from Najib. Although he never got much direct contact with Najib, he said the then prime minister’s “execution” did not contradict instructions from Jho Low.

Hazem described himself and Azlin as “loyalists” who will follow instructions of their leaders. He said Azlin was also a long-time family friend because they worked in the stock analysis industry before.

Hazem today managed to read out 107 points out of his 284-point witness statement. He will continue to read the rest of it tomorrow before judge Collin Sequerah.

The defence had previously tried to stop him from reading some parts of the witness statement on the grounds that they contained hearsay evidence.

This means the witness has no direct knowledge of the matter but was relying on something told to him.

The judge allowed the witness to read his witness statement in full for now and will rule on its admissibility at the end of the prosecution case.

The defence once again said all the claims are hearsay as they cannot get Low to verify these allegations.

Najib is on trial on four counts of power abuse to enrich himself with RM2.3 billion from 1MDB and 21 counts of laundering the same amount. He faces up to 20 years’ imprisonment, if convicted. The trial resumes tomorrow.

Earlier reports:

Sept 3, Najib’s 1MDB Trial: Day 47

Sept 2, Najib’s 1MDB Trial: Day 46

Sept 1, Najib’s 1MDB Trial: Day 45

Aug 17, Najib’s 1MDB Trial: Day 44

Aug 5, Najib’s 1MDB Trial: Day 43

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