BETWEEN September 2009 and October 2011, 1MDB paid a total of US$1.83 billion (RM5.5 billion then) to entities that were later revealed by investigators to be sham companies, the court heard today in the Najib Razak trial.
 
Former 1MDB CEO Shahrol Azral Ibrahim Halmi told the Kuala Lumpur High Court today that the amount was transferred to companies controlled either by Low Taek Jho, better known as Jho Low, or PetroSaudi International CEO Tarek Obaid.

The transactions include US$300 million to 1MDB-PetroSaudi Ltd and US$700 million to Good Star Ltd on September 30, 2009, purportedly as cash capital for a 40% stake in a joint venture with PetroSaudi International.

Investigators later revealed that Good Star was controlled by Low while the joint venture company was 100% controlled by PetroSaudi International.

The prosecution has accused Low, Tarek and former prime minister Najib of conspiring to defraud the state investor of billions of ringgit. Najib, then the finance minister, was the sole shareholder of 1MDB as head of Minister of Finance (MoF) Inc. He was also chairman of 1MDB’s advisory board.

On September 14, 2010, 1MDB paid US$500 million to 1MDB-PetroSaudi Ltd under a Murabaha financing agreement.

Finally, between May 20, 2011 and October 25, 2011, four payments amounting to US$330 million were transferred from 1MDB to Good Star, Shahrol told the court when cross-examined by the defence today. 

The 49-year-old witness said the money was for PetroSaudi International Ltd under a Murabaha financing agreement.

Shahrol said it was discovered later that instead of providing 1MDB with PetroSaudi International’s bank account to receive payment, Tarek had instead given the account number of Good Star, held by RBS Coutts Bank Ltd in Zurich.

The witness added that US$330 million had made its way in four payments into Good Star, which was then represented as a subsidiary of PetroSaudi International. 

Shahrol verified that Good Star was paid US$30 million on May 20, 2011; US$65 million on May 23, 2011; US$110 million on May 27, 2011; and US$125 million to October 25, 2011.

Shahrol testified that after reading a series of news articles, including those published by The Edge in 2015, he began to question Low on whether he owned Good Star.

“I asked Jho to explain. But he said Good Star was owned by PetroSaudi and he would get PetroSaudi to write a letter to confirm that,” he said. 

The witness agreed with a suggestion from lead defence counsel Muhammad Shafee Abdullah that a subsequent letter from Tarek later claiming PetroSaudi International’s ownership of Good Star was deceptive and false.

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.

He is represented by a dozen lawyers led by Shafee. Former Federal Court judge Gopal Sri Ram leads the prosecution 

The trial presided over by judge Collin Lawrence Sequerah continues on Monday. – November 7, 2019.