FORMER prime minister Najib Razak pushed Social Security Organisation (Perkeso) for a RM3 billion loan for 1MDB to pay an additional loan payment to PetroSaudi International (PSI) Ltd in early 2011, the court heard today.

Former 1MDB CEO Shahrol Azral Ibrahim Halmi told the Kuala Lumpur High Court that Najib allowed 1MDB to make an additional loan payment of US$750 million (RM3billion) to PSI to fund projects connected to the Maybourne Hotel Group in London.
 
The payment was subject to 1MDB receiving a RM3 billion loan from Perkeso, the witness added.

Referring to a March 30, 2011 minutes of a meeting between Najib and the 1MDB chairman , the witness said Najib had agreed for the money to be used to fund the London hotel takeover as well as for SRC International Bhd and the Kuala Lumpur International Financial District project, later renamed Tunku Razak Exchange.

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.

During examination-in-chief this morning, Shahrol said he never discussed the matter of the US$750 million loan payment with Najib. He added that the minutes were given to him by 1MDB intermediary Low Taek Jho, popularly known as Jho Low.

The 49-year-old witness said he informed the 1MDB board of directors at a meeting on April 4, 2011 that Najib had agreed for 1MDB to be increase its commitment to PSI.

The board was stunned by the request for an additional loan payment, Shahrol said. Then board chairman Che Lodin Wok Kamaruddin had referred to a letter dated February 18, 2011, from Saudi prince Turki Abdullah and PSI CEO Tarek Obaid.

The letter proposed that 1MDB make the additional loan payment via Murabaha notes worth US$750 million.

“The board of directors was blindsided (“terkilan”) because the request was made directly to the 1MDB shareholder, which was Datuk Seri Najib (who heads Minister of Finance Inc).

“It was as though they were forcing the board of directors to approve the additional loan payment request,” said the witness.  
   
Shahrol said the US$750 million was eventually reduced to US$330 million after further discussions between him and Low.

The money was transferred to Good Star Ltd in four tranches between May 20 and October 25, 2011.

In his opening statement on August 28, lead prosecutor Gopal Sri Ram told the court Good Star was owned by Low and that the prosecution intended to prove Najib had acted in concert with the Penang-born businessman to defraud 1MDB of billions of ringgit.

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

Sri Ram, a former federal court judge, leads the prosecution before Kuala Lumpur High Court judge Collin Lawrence Sequerah. – September 26, 2019.