FORMER 1Malaysia Development Bhd CEO Shahrol Ibrahim Halmi testified that he signed without question a joint venture agreement with an offshore entity based in the Cayman Islands instead of the real PetroSaudi International, the Kuala Lumpur High Court heard today. 

The witness testified in the trial of former prime minister Najib Razak that in September 2009, he was led to believe by former 1MDB business development executive director Casey Tang Keng Chee that PetroSaudi Holdings (Cayman) Ltd was a proper company. 

During cross-examination, lead defence counsel Muhammad Shafee Abdullah questioned the witness on his decision to proceed with the joint venture without verifying with the entity’s legal team. 

Shafee: I am putting it to you that you must know that a company like PetroSaudi Holdings (Cayman) Ltd is a different entity. The board says you entered into an agreement with PetroSaudi International. Why did you listen to Casey when you have the board to refer to, or you can call your own lawyers?

Shahrol: Casey was already working with our lawyers. 

Shafee: Who were your lawyers?

Shahrol: Wong & Partners. Casey said it was okay for us to sign. So I assumed he crossed the Ts and dotted the Is.

Shafee: If that is true, then you are signing away US$1 billion in 2009. That was a significant amount, then, and now. And you signed it away to an unknown entity. How do you account for that?

Shahrol: There was a legal team and Casey was experienced in international deals and he didn’t indicate that there was anything that shouldn’t be done. 

Shafee: How do you explain to the board about this.

Shahrol: The same way I explained to the court today, that Casey was the most experienced. He was put in charge to ensure that everything was put in order. 

Shafee: In hindsight, was this a silly decision on your part? Completely unreasonable?

Shahrol: In hindsight, could I have done this differently? Was it a silly decision? I could not have done things different because I relied on Casey. 

Shafee: You could have at least got Wong & Partners to cover you.

Shahrol: Agreed. I could have gotten Wong & Partners to have something in writing. 

Tang was involved with 1MDB from when it was still known as Terengganu Investment Authority, until 2011. 

The Malaysian Anti-Corruption Commission (MACC) issued a warrant of arrest for Tang in July. 

Najib, 66, 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.

Prosecutors have accused him of conspiring with the fugitive financier Low Taek Jho, commonly known as Jho Low, to defraud the state investor.

The witness testified today that on September 28, 2009, he signed a joint venture agreement between PetroSaudi Holdings (Cayman) Ltd and 1MDB PetroSaudi Ltd.

Shahrol, 49, told the court that the agreement was drafted by 1MDB’s lawyers from Wong & Partners, Low and Tang. Shahrol previously testified that Tang was regarded as one of Low’s men.

In the joint venture worth US$2.5 billion, 1MBD was to inject capital of US$1 billion in cash for a 40% stake.

Of the US$1 billion 1MDB was supposed to inject into the joint venture company, US$300 million was wired to JP Morgan (Suisse) SA, which held a joint bank account 1MDB opened with PetroSaudi Holdings (Cayman) Limited under the name of JVCo.

The remaining US$700 million was remitted to an account owned by Good Star, a company controlled by Low. – October 16, 2019.