FORMER 1Malaysia Development Bhd CEO Shahrol Azral Ibrahim Halmi returns to the stand today, the 28th day of former prime minister Najib Razak’s trial.

Lead defence counsel Muhammad Shafee Abdullah will continue his cross-examination of the prosecution’s ninth witness at the Kuala Lumpur High Court.

Yesterday, Shahrol testified that Najib advised against a second valuation of US$2.2 billion (RM9.2 billion) in assets allegedly owned by joint-venture partner PetroSaudi International (PSI).

He said Najib was consulted for advice in his capacity as chairman of the 1MDB board of advisers on October 16, 2009 after US$1 billion was allegedly channelled to PetroSaudi Holdings (Caymans) Ltd and Good Star Ltd.

Investigators later revealed them to be sham companies.

Prompted by the defence that Najib never explicitly issued an order against undertaking the second valuation, but was merely expressing his opinion, Shahrol said: “Realistically, when the prime minister gives his own opinion, I think a lot of people think this is something that must be done.”

The 49-year-old also told the court that the 1MDB board was not informed prior to a decision to split into two a US$1 billion investment in a joint-venture company set up with PSI.

Five days after the deal was signed on September 25, 2009, US$300 million was paid to PetroSaudi Holdings (Cayman) and US$700 million to Good Star without the board’s approval.

The joint-venture agreement was amended to change its account from BSI Bank to JPMorgan, said Shahrol.

Najib, 66, 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.

Prosecutors have accused him of conspiring with Penang-born financier Low Taek Jho, better known as Jho Low, to defraud the state investor.

The former prime minister is represented by a dozen lawyers. Former Federal Court judge Gopal Sri Ram leads the prosecution, while judge Collin Lawrence Sequerah presides.

The Malaysian Insight brings you today’s proceedings live:

1pm: Shafee tells Justice Sequerah that he has another matter to attend to. The judge allows it.

The trial will continue tomorrow afternoon at 2.30pm as Shafee has something on in the morning as well.

12.33pm: Shafee says Shahrol wilfully covered his eyes because he didn’t want to see that the deals were a sham.

12.14pm: Shahrol says the situation did not arouse his suspicion. Shafee suggests that a reasonable person should have been suspicious.

Shafee: You’re either suspicious, or you’re in on the whole deal.

Shahrol: I disagree.

12.08pm: He says the US$700 million was supposed to go into an account belonging to a PSI subsidiary, but “there was no black and white” as to where the money went.

At the time, he says, the 1MDB board of directors did not know that the money had gone into Good Star.

He adds that the board then asked him to seek Najib’s advice on the matter.

12.07pm: Shahrol says he had tried to get confirmation via email that the remaining US$300 million had gone into PSI, but did not get a reply.

12.04pm: What happened to the US$700 million, asks Shafee.

Shahrol says the money was “transferred to Good Star”.

“The PSI side, represented by Tarek, confirmed that PSI had received the US$700 million. We didn’t know that it went to Jho Low’s Good Star. We thought it was accounted for in PSI.”

12pm: The court hears that White and Case, the solicitors for the joint-venture deal, were paid £127,000 by Tarek.

Shahrol says the payment to the lawyers should have been made by PSI.

Shafee: Is it now possible to say Tarek paid them because he had a legal interest?

Shahrol replies that it is possible.

11.51am: Shahrol says Tarek did not declare to 1MDB-PSI the commission he received.

Of the US$85 million, Tarek paid Patrick Mahoney US$33 million, adds the witness, to which Shafee says: “Christmas came early for them.”

11.49am: Shafee says Tarek was paid US$85 million as commission for his work on the joint venture.

Shafee: What sort of commission was this, that someone could make US$85 million?

Shahrol: It was for him getting US$2.5 billion for the joint venture; US$1 billion from 1MDB and US$1.5 billion from PSI.

Shafee: This is slightly over 10% for commission.

Shahrol: Yes.

11.39am: Good Star paid Tarek Obaid, director of the 1MDB-PSI joint-venture company, US$85 million on October 5, 2009, just days after Good Star received the US$700 million payment, the court is told.

Shahrol says he was not aware about the money going to Good Star, nor did he know about the sum paid to Tarek.

11.30am: Shafee shows Good Star’s account statement from RBS Coutts.

On September 30, 2009, a US$700 million payment was made to the account.  The sum was from the joint venture between 1MDB and PSI, the court hears.

11.26am: Court is in session. Shafee apologises to Sequerah for the late start, as he had to attend to another matter in another court earlier this morning. He begins his cross-examination.

11.17am: Shafee and his team have just arrived. Najib and some supporters are seated in the public gallery. Shahrol takes the stand. – October 30, 2019.