THE government issued a letter of support to take responsibility for repaying 1Malaysia Development Bhd’s (1MDB) project debts, which ran into billions of ringgit, former state investment fund director Ismee Ismail told Kuala Lumpur High Court today.

He testified the support letter was issued two days after the 1MDB directors agreed in writing to raise US$3 billion (RM12.5 billion) in funds through a bond issuance.

The money was for a joint venture between 1MDB Global Investment Ltd (GIL), a 1MDB subsidiary, and Aabar Investments PJS.

It was also a government-to-government agreement with Abu Dhabi.

Ismee said convicted former prime minister Najib Razak greatly desired the joint venture to develop the Kuala Lumpur International Financial District (KLIFD) project, now known as Tun Razak Exchange, or TRX.

“The letter of support was issued by the government at a very rapid rate,” the 13th prosecution witness said in Najib’s RM2.28 billion 1MDB corruption trial.

“Approval to raise funds of US$3 billion was reached in the directors’ circular resolution (DCR) on March 12, 2013, and a letter of support was issued on March 14, 2013.”

In confirming the document in court today, Ismee also said the letter was signed by Najib as the minister of finance.

“This document stated that the government has taken note that 1MDB GIL will issue a bond of US$3 billion to be paid in full in March 2023.

“If 1MDB GIL is unable to pay this debt, the company 1MDB will provide financial assistance to meet its debt repayment obligations.

“If the 1MDB company fails in its obligation, then the government will take the responsibility,” Ismee said.

He also confirmed that he signed and approved the DCR for the joint venture in his capacity as 1MDB director.

“It was a proposal that could initially benefit the company and it was the wish of Najib as then prime minister and minister of finance to enter into a joint venture with the Aabar side.

“Almost all the decisions reached by 1MDB to fundraise the US$3 billion were through DCRs and special right redeemable preference shareholders resolutions (SRRs).

“If an immediate decision is needed, then it will usually be made through DCR and SRR,” he said.

On Tuesday, the 12th prosecution witness, former chief financial officer Azmi Tahir, testified that the US$3 billion was spent on something other than funding the joint venture, adding that he believed the money transfers were sanctioned by Najib.

It was also said in the trial that the joint venture was actually dealing with a sham company, which shared the same name as the real Aabar in Abu Dhabi.

Najib, 68, is facing 25 charges of abuse of power and money laundering over RM2.28 billion in 1MDB funds deposited into his AmBank accounts between February 2011 and December 2014.

He faces up to 20 years in prison if convicted.

The trial continues before High Court judge Collin Lawrence Sequerah. – November 18, 2021.