THE prosecution’s ninth witness, former 1Malaysia Development Bhd CEO Shahrol Azral Ibrahim Halmi, returns to the stand on the 31st day of Najib Razak’s trial.

Lead defence counsel Muhammad Shafee Abdullah will cross-examine Shahrol at the Kuala Lumpur High Court.

Yesterday, Shahrol testified that the 1MDB board was persuaded to enter another joint venture with PetroSaudi International (PSI) despite a previous JV that resulted in US$1 billion (RM4.1 billion) being channelled elsewhere.

In mid-2010, the board was coaxed into agreeing to a PSI proposal to jointly invest in French energy firm GDF Seuz for a 4.23% stake, the court heard.

PSI, then led by CEO Tarek Obaid, proposed that 1MDB put up US$1 billion and promised that the state investor would get a 20% discount. As with the 1MDB-PSI JV in 2009, this enterprise would also purportedly be valued at US$2.5 billion.

In the earlier deal, US$300 million was paid to PetroSaudi Holdings (Cayman) Ltd and US$700 million to Good Star Ltd on September 30, 2009, without the board’s approval.

Investigators later revealed them to be sham companies, with Good Star controlled by fugitive financier Low Taek Jho, or better known as Jho Low.

Good Star then paid Tarek US$85 million, five days after it received US$700 million from 1MDB.

Former prime minister 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 the Penang-born Low to defraud the state investor.

Najib is represented by a dozen lawyers. Former Federal Court judge Gopal Sri Ram leads the prosecution before judge Collin Lawrence Sequerah.

The Malaysian Insight brings you today’s proceedings live:

3.57pm: Court takes a break.

3.46pm: Shahrol confirms that there was a request for 1MDB to borrow US$500 million from Standard Chartered Labuan, with the sum to refinance the US$500 million that had been transferred from 1MDB’s AmBank account to PSI.

3.17pm: Shafee suggests that 1MDB would have flagged suspicious transactions. Shahrol agrees.

3.10pm: Shafee is going through 1MDB’s accounts. Shahrol says PSI had led 1MDB to US$2 billion in “indebtedness”.

2.43pm: Court is back in session.

12.39pm: Court breaks for lunch.

12.36pm: Shafee asks if 1MDB had authority to lend money. Yes, replies Shahrol.

Shafee asks if the state investor had a licence to lend funds. Shahrol says no.

12.05pm: Court resumes after a short break. Shahrol says in 2010, 1MDB was in talks to purchase the Bakun Dam as the federal government was unable to sell it. He says the discussions had to be called off.

10.53am: The court hears that Najib, too, disagreed with the JV, and said, in writing, that due diligence and feasibility studies must be carried out.

10.10am: They are going through the 1MDB board’s suggestions on entering another JV with GDF Suez.

According to the minutes of the board meeting, former 1MDB chief investment officer Nik Faisal Ariff Kamil suggested that due diligence be carried out before the JV was signed. The board chairman suggested that there would be no immediate monetary returns, and that 1MDB would not control the French energy company.

9.55am: Court is in session. Shahrol takes his oath on the stand. – November 5, 2019.