THE management of 1Malaysia Development Bhd performed due diligence only as far as doing an internet search in 2009 to verify the assets of its joint venture partner PetroSaudi International, the court heard today.

Former 1MDB CEO Shahrol Azral Ibrahim Halmi told the Kuala Lumpur High Court that then 1MDB executive director Casey Tang’s team handled the verification of PetroSaudi’s alleged US$2.2 billion (RM9.2 billion) oil and gas properties in Argentina and Turkmenistan.

Under cross-examination by lead defence counsel Muhammad Shafee Abdullah, the 49-year-old witness said the team did not do more than perform an online search of the assets.

Shahrol: To the best of my knowledge, Casey’s team did an internet search and that was it.

Shafee: You must have printed it out?

Shahrol: No, I don’t have it anymore.

Shafee: The MACC investigated and they did not ask about this?

Shahrol: No.

Shafee: Did he (Casey) show you the (results of the) internet search?

Shahrol: To the best of my recollection, yes I saw.

Shafee: Were you happy with the search?

Shahrol: Yes.

During cross-examination this afternoon, Shahrol said the internet search revealed only the location of the purported assets, one of which was on disputed territory claimed by Russia and Turkmenistan.

The witness added that he only learnt from news reports in 2015 that 90% of PetroSaudi’s assets were located in Turkmenistan.  

Shafee asked the former chief executive whether he felt enough was done to check on the assets.

Shahrol: It (the search) was good enough for me because I trusted Casey and the PSI (PetroSaudi) counterpart.

Shafee: You trusted them enough to spend US$1 billion of 1MDB’s money and put it at risk?

Shahro: Yes.

PetroSaudi signed an agreement with 1MDB in September 2009 to invest US$2.2 billion of assets in a joint venture deal. IMDB, meanwhile, would inject a cash capital of US$1 billion for a 40% stake in the enterprise.

1MDB wired US$300 million of the cash to a PetroSaudi Holdings (Cayman) Ltd account under the name “JVCo”. The remaining US$700 million was remitted to an account owned by Good Star, a firm controlled by 1MDB intermediary Low Taek Jho, commonly known as Jho Low.

Prosecutors have accused Najib of conspiring with the Penang-born Low to defraud the state investor.

Najib is on trial on 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 imprisonment upon conviction. 

The 66-year-old accused is represented by a dozen lawyers. Former Federal Court justice Gopal Sri Ram leads the prosecution before judge Collin Lawrence Sequerah.

The trial continues. – October 24, 2019.