AN internal memo among 1Malaysia Development Bhd’s management in 2012 described the repatriation of US$1.83 billion (then RM5.5 billion) from its joint venture with PetroSaudi International (PSI) as Project PITA, an acronym for “pain in the ass”, the high court heard today.

This was revealed by former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi when questioned on “Project PITA” during cross-examination by lead defence counsel Muhammad Shafee Abdullah.

“It was an internal joke among the management then. P stood for PSI. PITA also stood for pain in the ass, because it was a pain in the ass to repatriate the funds,” Shahrol testified.

“This was because you needed to delicately track the G2G (government-to-government deal), we could not proceed on a purely commercial basis.

“This was a sensitive issue that we needed to tread carefully on. We were told Datuk Seri Najib needed to be consulted to approve certain things and so on.”

Shahrol said 1MDB had wanted to bring money back to invest in Bandar Malaysia and Tun Razak Exchange.

Yesterday, Shahrol denied that the repatriation of investment from the 1MDB-PetroSaudi International joint venture was due to loss of confidence.

The JV investment was converted into Murabaha notes in 2010 and was to be converted back into equity in 2012, Shahrol testified.

The equity conversion was supposed to be carried out via 1MDB’s purchase of a 49% stake in PetroSaudi Oil Services Ltd (PSOSL), a subsidiary of PSI.

In joint venture deals with PSI, 1MDB transferred a total of US$1.83 billion to entities later revealed to be sham companies.

The amount was transferred between September 2009 and October 2011 to firms controlled either by Low Taek Jho or his associate, PSI CEO Tarek Obaid.

The transactions included US$300 million to 1MDB-PetroSaudi Ltd and US$700 million to Good Star Ltd on September 30, 2009, purportedly capital for a 40% stake in the JV with PSI.

Investigators revealed that Good Star was controlled by Low, while the JV company was 100% controlled by PSI.

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

Finally, between May 20 and October 25, 2011, four payments amounting to US$330 million were transferred from 1MDB to Good Star. The sum was for PSI under a Murabaha financing agreement.

Najib is on trial on four counts of abusing his power 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. – May 21, 2020.