DEBUNKED

Najib’s 1MDB Trial: Day 50

September 17, 2020

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Mohd Hazem Abd Rahman received RM97,000 as his last drawn salary when he was holding the position of 1Malaysia Development Berhad (1MDB) chief executive officer, the Kuala Lumpur High Court heard today.

Hazem, 48, said he received a RM93,000 salary when he began as CEO in 2013 and received five months’ bonus the same year.

“During my tenure as the CEO, I received (the bonus) twice. The second one was 10 months’ bonus in 2014,” he said.

The 10th prosecution witness was replying to additional questions from deputy public prosecutor Mohamad Mustafa P Kunyalam in former prime minister Datuk Seri Najib Tun Razak’s RM2.3 billion 1MDB graft trial.

Hazem said he first joined 1MDB as the chief operating officer (COO) in 2012 and replaced his predecessor, Datuk Shahrol Azral Ibrahim Halmi the following year.

“As the COO, I received a RM65,000 monthly salary,” he said.

Before joining 1MDB, Hazem held the position as the managing director of Sime Darby Auto Connexion, with RM38,000 as his last drawn salary.

The High Court previously heard that Shahrol’s last-drawn salary as the CEO was RM99,000 a month and he received a bonus of 18 months’ pay.

Asked if he had conspired with Jho Low to swindle money from 1MDB, Hazem answered in the negative.

He also denied having received a cent from the funds raised through loans and bonds from the sovereign wealth fund during his tenure as CEO and COO.

Meanwhile, during the cross-examination, lead defence counsel Tan Sri Muhammad Shafee Abdullah went through Hazem’s career progression, in which the witness said he received a RM1,800 pay when he first started as a Senior Executive with Arab Malaysian Merchant Bank from 1996 to 1998.

To this, Shafee jokingly said everybody would not forget their first salary and said his first drawn salary was RM670 back when he was with the Attorney-General’s Chambers as a deputy public prosecutor.

Hazem in 1998, he earned RM2,500 a month when he joined Dana Modal Nasional Berhad as a senior executive.

“Then I moved on to Credit Lyonnais Securities Asia Kuala Lumpur as an Investment Analyst in 2002. My last drawn salary in Credit Lyonnais was about RM12,000.

“In 2002, I joined Deutsche Bank Kuala Lumpur as an Investment Analyst until 2006 with RM15,000 as my last drawn salary,” said Hazem.

Hazem also testified that when he joined 1MDB in 2012, it was Shahrol who interviewed him at Eastin Hotel in Petaling Jaya.

Shafee: Were you headhunted by Shahrol?

Hazem: He did not headhunt me. It was my former boss in Arab Malaysian Merchant, Datuk Nor Badli Mohd Alias.

Hazem said Nor Badli was a friend of Tan Sri Ismee Ismail, who was one of the board members in 1MDB.

“Datuk Nor Badli told me that 1MDB was looking for a COO and I could send in my resume directly to Ismee if I was interested,” he said.

Hazen also told the High Court today that he was worried because the company was high in debts and he had doubts with 1MDB’s capacity to repay the debts.

He said among the debts that had to be paid in 2014 was to Maybank for a loan taken by 1MDB to buy Tanjong Power shares in 2012, amounting to RM2.5 billion.

“There were many 1MDB expenses which involved project financing funds such as development of infrastructure for TRX (Tun Razak Exchange) and JIMAH (JIMAH Energy Ventures), which were financed through new debts,” he added.

At that time, he said, he did not know whether 1MDB still had its fund abroad or that it had been used for UMNO, as was told to him earlier.

The 1MDB’s fund abroad then was at an estimated US $3.8 billion (RM13 billion), he said, adding that the amount was enough to pay off Maybank’s debt and also as start-up capital for any 1MDB projects in Malaysia.

He said despite being the CEO, he had no access nor was in the know about the company’s funds abroad.

The persons with access to it were only Jho Low and Jasmine Loo (1MDB lawyer), he said, adding that Low had also instructed him to not interfere with the foreign funds.

He said he often met with Datuk Azlin Alias (now deceased), who was then Najib’s principal private secretary, to tell him of his concerns and intention to resign.

“I also sent an email to Azmi Tahir (Chief Financial Officer of 1MDB) informing him of my concerns about the unreasonable plans made by Jho Low for 1MDB as early as September 2013.

“I also expressed my intention to resign to Azmi Tahir,” he added.

The witness also said that 1MDB’s management worked hard to prepare the prospectus for the listing (IPO) of its subsidiary, 1MDB Energy Group, on Bursa Malaysia.

However, he said, it could not be listed on Bursa Malaysia due to, among others, most of the mass media, such as The Edge and Kinibiz, give many negative views on 1MDB and this gave a negative perception to investors.

Hazem said Azlin always advised him to resign after the listing of 1MDB Energy on Bursa Malaysia.

“But, at the end of October 2014, after I returned from performing the Haj, I mentioned to Jho Low and Datuk Azlin Alias that I was serious about resigning as the CEO of 1MDB,” he added.

Hazem said he also told Azlin to tell Low to find the candidate to replace him because none of his subordinates wanted to replace him.

Nobody wanted the top job at 1MDB as it was high risk and politically exposed, Hazem said.

He added that even his colleagues did not want the job as it meant taking on a company in debt and in need of a bailout.

He said then on Jan 3, 2015, upon his return from a holiday, Azlin informed him that they had found a candidate for the post of assistant CEO and that he was asked to hold the CEO post until Edra Energy’s listing on Bursa Malaysia Malaysia in mid-2015.

“On Jan 5, 2015, Arul Kanda came to report as 1MDB president, which meant that as the CEO, I should report to him. At that time, I also thought that it was the appropriate time to resign as the post of president is similar to CEO,” he added.

Najib, 67, faces four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The hearing before Justice Collin Lawrence Sequerah continues Oct 5.

Earlier reports:

Sept 15: Najib’s 1MDB Trial: Day 49

Sept 14, Najib’s 1MDB Trial: Day 48

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