FORMER 1Malaysia Development Bhd CEO Shahrol Azral Ibrahim Halmi denied knowledge of an email exchange in which a Petrosaudi International Ltd (PSI) executive proposed to blame 1MDB for US$1 billion (RM4.1 billion) in losses, the high court heard today.

The letter, send by PSI director Patrick Mahony to PSI CEO Tarek Obaid on August 7, 2010, also discussed plans to meet former prime minister Najib Razak to explain the loss of US$500 million in the joint venture between 1MDB and PSI.

When cross-examined today, Shahrol was shown the email between Mahony and Tarek by lead defence counsel Muhammad Shafee Abdullah.

“I am not comfortable to comment on this because I have no idea of what they were talking about,” the witness said, to which presiding judge Collin Lawrence Sequerah commented that the witness was not privy to the goings-on at PSI then.

In a joint venture with PSI in 2009, 1MDB had injected US$1 billion for a 40% stake in the company. Five days after the joint venture deal was signed on September 25, 2009, US$300 million was paid to PetroSaudi Holdings (Cayman) Ltd and US$700 million to Good Star Ltd.

Both were later revealed by investigators to be sham companies, with Good Star controlled by fugitive businessman Low Taek Jho, better known as Jho Low.

In the email, Mahony not only proposed that the US$500 million loss be hidden, but also that Najib should be pressed for a further US$500 million investment.

The fourth paragraph of the email, read out in court, is as follows:

“One the US$1 billion funding, the thing to tell the PM (Najib) is that we have some very good investment prospects pending and that we really need the funds quickly. The constant broken promises and delays have hurt our business hugely and cost us (I think saying delays have cost us helps us because we can then blame them for the losses later).

“I wouldn’t discuss the US$500 million write-off with the PM or any losses at this point (this is Jho’s thoughts for now but it makes sense) because I think the PM thinks we are making good investments.

“So I think we promote the JV and all the great things we can do with it but we need to make it clear we need the funds soon and that delays are costing us – therefore we urge the PM to do everything in his power to make sure we have the full US$1 billion as soon as possible.”

During cross-examination, Shahrol was prompted on whether he thought there was a conspiracy by the duo to deceive Najib then.

“Based on point four, and only point four, it does look like there was a conspiracy to deceive the PM,” the witness said.

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

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.

Former Federal Court judge Gopal Sri Ram leads the prosecution.

The trial continues tomorrow. – November 6, 2019.