THE Najib Razak trial over 1Malaysia Development Berhad (1MDB) funds enters its 13th day today with the ninth prosecution witness, former Terengganu Investment Authority (TIA) CEO Shahrol Azral Ibrahim Halmi, returning to the stand.

Yesterday, Shahrol told the court that Najib had ordered TIA to proceed with raising RM5 billion through Islamic medium term notes in 2009, despite being told otherwise by then Yang di-Pertuan Agong Sultan Mizan Zainal Abidin.

The instruction was given on May 22, 2009 via TIA special adviser Low Taek Jho, who said the bonds issuance must continue, even if there was opposition from other shareholders.

Earlier that day, Shahrol, along with former TIA director Ismee Ismail, had appeared before the Agong at the Terengganu palace.

Sultan Mizan had demanded that the duo signed resolutions suspending the bonds issuance.

Shahrol was later told by former TIA executive director Casey Tang and former AmBank relationship manager Joanna Yu that the bonds issuance could not be stopped as it had received the board’s approval and because some bonds had been sold.

Shahrol also testified that he was informed by a Malaysian Anti-Corruption Commission officer last year that Low owned the two entities, based in Singapore and Hong Kong, which had bought the bonds

Najib is on trial for 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 in prison if convicted. 

Shahrol said Low, commonly known as Jho Low, took on the role of an “orchestrator” of 1MDB operations on behalf of Najib.

He said Low had encouraged 1MDB executives to “work in silos” and that information was given out only on a “need-to-know” basis.

“Jho Low said this was to protect the interests of Datuk Seri Najib,” the witness told the court yesterday.

Najib is represented by a dozen lawyers led by Muhammad Shafee Abdullah.

Former Federal Court judge Gopal Sri Ram leads the prosecution while Kuala Lumpur High Court judge Collin Lawrence Sequerah presides.

The Malaysian Insight brings you today’s proceedings live:

4.35pm: Sri Ram: “Did the US$700 miilion to Goodstar produce any benefit to 1MDB?” 

Shahrol: “No.”

Sri Ram: “Did the US$300 million to PSI Cayman produce any income for 1MDB?” 

Shahrol: “No.”

Court is adjourned to 9.30am tomorrow.

4.28pm: Sri Ram continues questioning Shahrol on the JV. 

Shahrol says Jho Low orchestrated the JV from the beginning and believes that Najib had given Jho Low the confidence to deal with PSI and 1MDB issues.

He says that during the period from October 2009 to February 2010 he and Tang, sought information about the JV for the purpose of an audit.

Shahrol says they failed to get enough information to provide to EY auditors, because they failed to obtain co-operation from Mahoney and Obaid.

Shahrol says Mahoney and Obaid had no interest in entertaining them and they were more likely to communicate with Jho Low only.

3.49pm: Sri Ram questions Shahrol on why didn’t he consult the BOD on the transactions.

Shahrol says they were under pressure to sign the JV agreement and they had to complete payment by September 30, 2009. 

He says there were emails and Blackberry Messenger messages (BBMs) between him, Mahoney, Jho Low and Tang. 

Sri Ram: “To what end?” 

Shahrol: “Until the transactions is complete.” 

Sri Ram: “Did Najib know about the transactions?” 

Shahrol: “No.”

3.31pm: Sri Ram continues questioning Shahrol on the transactions to PSI. 

Shahrol says that Bakke became angry with him and management, includingTang, on managing the transaction.  

He says Bakke told them to recover the US$700 million from PSI because it was not entered into a valid account, which was that of the 1MDB-PetroSaudi JV.

3.23pm: Sri Ram asks Shahrol about the 1MDB and Pertrosaudi joint venture (JV). 

Shahrol says that after all the JV processes were successful, he call for a BOD meeting to inform the board of its current status. The meeting was held on October 3, 2009, chaired by Bakke and attended by all BODs.

Shahrol says he reported the current status of the JV where 1MDB has paid its share of US$1 billion under 2 tranches of US$700 million each into a Good Star Ltd account affiliate to PSI, as well as US$300 million to the 1MDB-PetroSaudi JV account.

Shahrol says Bakke asked for justification why US$1 billion was banked directly into the PetroSaudi JV MDB account. Shahrol told him that it was carried out based on feedback from Jho Low.

3.01pm: Sri Ram: “Did anyone gave any authority for Tang to enter into the agreement (with Goodstar)?” 

Shahrol: “No.” 

Sri Ram: “Did any of the BOD give consent?” 

Shahrol: “No.” 

Shahrol also confirmed that this agreement was never presented at any 1MDB BOD meeting and he had not viewed the document.

2.57pm: Sri Ram asks Shahrol about documents involving Good Star Limited and IMDB. 

Shahrol says he didn’t know anything about it, he never directed it and never ask Casey Tang to sign any agreement with Good Star.

He says that Tang was only given the mandate to manage the Foreign Exchange such as the transaction with Deutsche Bank (Malaysia) Berhad for a US$1 billion transaction via DCR dated September 26, 2009. 

Shahrol says that throughout his tenure as CEO of 1MDB, he did not perform any business matters on behalf of Good Star Limited.

2.42pm: Court is in session.

12.53pm: Court is in recess.

12.23pm: Sri Ram asks Shahrol about the letter from Ernst & Young (EY) with proposal to provide a discussion paper on the joint venture between IMDB and PetroSaudi International (PSI).

Shahrol says he saw the document at that time but was not involved in discussions with EY as stated in the letter. 

He says 1MDB representatives were Kelvin Tan and Vincent Koh, and the purpose of the letter was to engage EY as a tax adviser for the joint venture agreement.

He says a special board meeting was scheduled for September 18, 2009.

Shahrol says as a personal preparation, he had asked Low to inform him about the whole project.

He says Low told him about the important things that he needed to know and how to answer questions that might be asked by the board.

11.45am: Sri Ram asks Shahrol about a 1MDB letter to Najib on December 22, 2010 about the due diligence request from the auditor-general’s office.

Shahrol says in this letter, he informed Najib of additional document requests by the audit team.

Shahrol says the board of directors approved by Najib himself had agreed to not provide the additional information required by the auditor-general.

11.37am: Court is in session.

11.12am: Court is in recess.

11.08am: Shahrol says the National Audit Department sent him a letter dated October 5, 2010 regarding the due diligence audit on 1MDB.

He says the department had requested a copy of all related audit documents.

He says the letter was issued by Yusnani Zakaria on behalf of the auditor-general.

10.44am: Sri Ram asks about Shahrol about a letter to Najib on 1MDB updates and approvals, and the audit on 1MDB.

Shahrol says an audit would be a political risk for Najib, and sought advice from Najib through Low.

“The advice was there was no need for due diligence or audit exercise”.

Shahrol says it was because Ernst & Young was hired and it would submit the audited report to the Finance Ministry once ready.

10.28am: Sri Ram asks Shahrol about the name change from TIA to 1MDB.

Shahrol says TIA directors’s resolution was passed after the EGM on September 4, 2009, which included the name change from TIA to 1MDB.

“Before the 1MDB name was finalised, I asked the company secretary to check out some of the proposed names such as 1Malaysia Development Berhad, MDB Wealth Berhad, Malaysia Development Berhad and Malaysia Wealth and Capital Creation Berhad.

“But these names are not allowed by the Companies Commission of Malaysia because of a controlled word. I then received a letter of support from Najib to confirm the use of the name
1MDB so it can be registered with the commission.”

10.16am: Sri Ram asks Shahrol about the US$1 billion in 1MDB accounts.

Shahrol says the money was for investment for TIA on September 30, 2009.

He says after converting into ringgit, 1MDB had RM3.3 billion, and was used to service the payment for the RM5 billion bonds.

He says the coupon payment was done every six months, usually at RM100 million each.

10.05am: Sri Ram asks Shahrol about his letter of appointment.

Shahrol says the appointment letter as a 1MDB board member was issued by Najib on September 17, 2009, made by the prime minister in accordance with the requirements of article 68 of M&A 1MDB.

9.53am: Court is in session. – September 25, 2019.