FORMER 1Malaysia Development Bhd (1MDB) chief executive officer (CEO) Shahrol Azral Ibrahim Halmi told the Kuala Lumpur High Court today that the deal between the state investor and Abu Dhabi’s International Petroleum Investment Co in 2012 was a sham. 

The deal, which involved the purchase of energy assets for 1MDB, was raised today by defence lawyers in Najib Razak’s 1MDB trial involving RM2.3 billion for which he faces four counts of abuse of power to enrich himself and 21 sounds of money-laundering.

Shahrol Azral, who was being cross-examined by Najib’s lawyer, Wan Aizuddin Wan Mohammed, was asked if the deal was used as an instrument to embezzle money from 1MDB and its board. 

“At first I did not believe it, but now in hindsight, yes,” Shahrol replied.

The 49-year-old said he was not privy to the dealings as he had left it to Low Taek Jho (Jho Low), former 1MDB general counsel Jasmine Loo and former 1MDB chief financial officer Azmi Tahir. 

“I was part of 1MDB but I was not personally involved in the preparation. I trusted their professionalism to do their work,” Shahrol Azral said.

He said negotiations on the deal involved the Prime Minister’s Office (PMO) and that 1MDB merely acted under instructions. 

“It was at a high level; (banker) Goldman Sachs dealt with IPIC. I wasn’t involved in that, I don’t have direct knowledge.

“We were just taking instructions. We left it to PMO and Goldman to negotiate,” Shahrol Azral said. 

1MDB had paid US$577 million to Aabar Investments PJS Limited (Aabar BVI), supposedly an IPIC subsidiary but later revealed to be a fake entity based in the British Virgin Islands and reportedly controlled by Low.

The payment was as a security deposit for the US$1.75 billion bonds that Goldman Sachs helped to issue for 1MDB’s purchase of energy assets, with IPIC as guarantor.

Shahrol Azral said he was assured by Low that the money would be returned to 1MDB but this never happened. 

“I contacted Jho Low and asked about the amount. He assured me this was a deposit and we (1MDB) will get the money back,” he said. 

Wan Aizuddin asked Shahrol if he was part of a “criminal scheme” with Low, Loo, Azmi and others to embezzle millions from 1MDB. 

Shahrol Azral said: “I disagree”. 

Shahrol Azral is the ninth witness to be cross-examined. 

High court judge Collin Lawrence Sequerah is presiding over the case.

For the four counts of abuse of power and the 21 counts of money laundering, Najib faces up to 20 years imprisonment, if convicted.

The trial continues tomorrow. – August 3, 2020.