MINUTES of a 1Malaysia Development Bhd board meeting in 2010 omitted compromising information to protect then prime minister Najib Razak, testified former CEO Shahrol Azral Ibrahim Halmi today.

During cross-examination, the 49-year-old prosecution witness told the Kuala Lumpur High Court that the board was under pressure to leave out details of a joint-venture (JV) investment with PetroSaudi International Ltd (PSI) that investigators later discovered to be a sham.

“Throughout my tenure, from 2009 to 2013, members of the board and I were under this pervasive view that we must be careful what we minute, in case it’s turned against our shareholder, Najib.”

Lead defence counsel Muhammad Shafee Abdullah pressed the witness on why there were delays by then 1MDB auditor Ernst & Young in signing off the sovereign wealth fund’s account books, which included the value of oil assets purportedly owned by PSI.

Shahrol said the details were not minuted as there had been discussions to prevent “extra ammunition” for political attacks.

“There was a good reason. At the time, the phrasing was ‘mesti (must) protect PM’.”

He confirmed that Ernst & Young was subsequently sacked and replaced with KPMG, which signed off on 1MDB’s account books.

Shahrol said he was not involved in the firing of Ernst & Young after the auditor requested the 1MDB management to submit more information regarding the PSI JV assets.

Asked if he suspected anything was amiss after the auditor raised concerns, the witness said he was under the impression that the deal was sanctioned by Najib, PSI chief executive Tarek Obaid and Prince Turki Abdullah, who was regarded as influential.

“I was just a cog in the machinery. I wasn’t involved in the decision-making.”

He said he later took up the matter with 1MDB intermediary Low Taek Jho, better known as Jho Low.

Najib is on trial on four counts of abusing his power to enrich himself with RM2.3 billion from 1MDB and 21 counts of laundering the same amount. He faces up to 20 years’ imprisonment upon conviction.

Last year, Shahrol testified that 1MDB, under Najib’s stewardship, transferred US$1.83 billion (RM5.5 billion) to entities later revealed to be sham companies.

The amount was transferred between September 2009 and October 2011 to firms controlled either by Low or his associate, Obaid.

The transactions included US$300 million to 1MDB-PetroSaudi Ltd and US$700 million to Good Star Ltd on September 30, 2009, purportedly as cash capital for a 40% stake in the JV with PSI.

Investigators revealed that Good Star was controlled by Low, while the JV company was 100% controlled by PSI.

On September 14, 2010, 1MDB paid US$500 million to 1MDB-PetroSaudi Ltd under a Murabaha financing agreement.

Finally, between May 20 and October 25, 2011, four payments amounting to US$330 million were transferred from 1MDB to Good Star.

The sum was for PSI under a Murabaha financing agreement, Shahrol had said. – May 19, 2020.