THE defence in Najib Razak’s 1Malaysia Development Bhd (1MDB) trial suggested that a US investment bank had helped the sovereign wealth fund raise billions in US dollar bond sales in a “sophisticated conspiracy” to criminally gain profit.

Former 1MDB chief executive officer (CEO) Mohd Hazem Abd Rahman, 47, however, was hesitant to agree with the contention of Najib’s lead counsel, Muhammad Shafee Abdullah, during cross-examination before high court judge Collin Lawrence Sequerah.

“I believe so,” said Hazem, the 10th prosecution witness who also seemed hesitant to agree with Shafee’s suggestion that the conspiracy was carried out by 1MDB insiders, one of them being fugitive businessman Low Taek Jho, or Jho Low, with the help of US investment bank, Goldman Sachs.

Shafee then referred the witness to a 1MDB director’s circular resolution (DCR) which was signed off by the company’s chief financial officer (CFO) Azmi Tahir.

Shafee: I want to find out, what I will ask you is disclosure in a way, regarding the conspiracy to mislead 1MDB, that is to profit wrongfully. The aggregate acquisition amount is RM2.75 billion at most, but the bonds raised was US$1.75 billion (around RM5 billion at the time) which means we have RM5 billion in hand for acquisition at RM2.75 billion which is almost double the amount.

Hazem: Yes.

Shafee: As a person with a finance background, having read all the documents present, can you offer a reason why another billion was necessary?

Hazem: From my view, it was not necessary.

Shafee then brought up another DCR in relation to the bonds to be issued by 1MDB Energy Langat (1MEL) which was signed by another 1MDB CEO, Shahrol Azral Ibrahim Halmi and Azmi.

The document, among others, clearly stated that 1MDB is a sole guarantor, with no mention of International Petroleum Investment Co (IPIC) as a guarantor, even though there was a verbal statement between 1MDB personnel that it would. 

In response to this, Hazem said he was not aware of IPIC not being a guarantor (for the bond) at the material time, adding that he only realised this during the current cross-examination.

Shafee said Azmi should have known that IPIC was not a guarantor, also pointing out that Shahrol Azral has made “dubious statements” that there was an “indirect guarantee (from IPIC)”.

Hazem: I think there was an indirect guarantee but I don’t know the structure. From what I have said earlier, the bonds could not be raised unless IPIC is a guarantor.

Shafee: So there can be an indirect guarantee but you don’t know how it is mechanised.

Hazem: Yes.

Further questioned by the lawyer, Hazem agreed that it was not normal for 1MEL to request its correspondence sent to its Hong Kong office instead of the Malaysia office.

Referring to a document from the defence bundle, Shafee said 1MEL has asked Zurich-based Falcon Private Bank to send all post to its Hong Kong office and asked the witness if he has any idea why 1MEL would want to do this, to which the witness replied that he could not comment and was not aware as to who made the directive even though he was one of the signatories of 1MEL. 

Najib, 67, is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The trial continues. – Bernama, January 6, 2020.