FORMER prime minister Najib Razak was like an “emperor” who ruled over 1Malaysia Development Bhd, including during the three principal phases of alleged money-laundering between 2009 and 2013, a witness told Kuala Lumpur High Court today.

During cross-examination today, former 1MDB CEO, Shahrol Azral Ibrahim Halmi, refuted suggestions by lead defence counsel Muhammad Shafee Abdullah that certain decisions could be undertaken by the board of directors without tacit approval from Najib.

Shahrol said, while provisions under Article 117 of 1MDB’s memorandum and articles of association may allow the board some leeway, Najib held tremendous power in actual practice.

The witness referred to the 2009 joint venture with PetroSaudi International and the 2012 bond offerings linked to International Petroleum Investment Company (IPIC) that were rushed through due to top-down pressure.

Shahrol, who was 1MDB CEO from 2009 to 2013, and later a board member until 2016, told the court that 1MDB directors were duty-bound to execute Najib’s wishes.

“From 2009 until 2013, (and) when I left as CEO, I continued to see the prime minister, Najib, as the ultimate power in 1MDB,” the 49-year-old witness testified.

Shafee: I am putting it to you that you have the wrong interpretation (of the company’s constitution). You’ve just made the prime minister the emperor of 1MDB. Like the good old days in India. No checks and balance.

Shahrol: In the case of phase I, phase II and phase III, I have to say he was.

Shafee: So, he was the emperor of 1MDB?

Shahrol: Yes.

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.

In his opening statement in August 28, senior deputy public prosecutor Gopal Sri Ram described three principal phases whereby funds were laundered through the sovereign wealth fund.

In the Good Star phase, over US$1 billion (then roughly RM3 billion) were fraudulently diverted between 2009 to 2011 from 1MDB to companies controlled by fugitive financier Low Taek Jho, commonly known as Jho Low.

Prosecutors have accused Najib of conspiring with the Penang-born Low, who is on the run, to defraud the state investor.

The fraudulent transfer allegedly was carried out under the pretence of a joint venture with PetroSaudi International.

Following that was the Aabar BVI phase in 2012, where some US$1.37 billion was misappropriated from 1MDB via two separate bond offerings by Goldman Sachs and guaranteed by both 1MDB and International Petroleum Investment Company (IPIC).

In the Tanore phase in 2013, the DOJ said several people, including 1MDB officials, had in 2013 diverted more than US$1.26 billion out of a total of US$3 billion that 1MDB had raised through a third bond offering from Goldman Sachs.

The proceeds of this bond offering were supposed to fund a joint venture between 1MDB and Aabar, called the Abu Dhabi Malaysia Investment Company (Admic), Sri Ram said.

The purpose of this joint venture was to develop TRX or the Tun Razak Exchange in Kuala Lumpur, he said. The joint venture never materialised.

Najib is represented by a dozen lawyers, led by Shafee.

Sri Ram, a former Federal Court judge, leads the prosecution before judge Collin Lawrence Sequerah. – October 17, 2019.