Najib orders RM5b bond issuance despite Sultan Mizan’s disapproval

Shahrol Azral tells the court that the Terengganu Ruler instructed him to suspend the bond until the terms were fulfilled


FORMER Prime Minister (PM) Datuk Seri Mohd Najib Razak (picture) had directed Terengganu Investment Authority Bhd (TIA) to continue with the RM5 billion bond issuance despite objections by Terengganu Ruler, Sultan Mizan Zainal Abidin to suspend the bond.

Former 1Malaysia Development Bhd (1MDB) CEO Datuk Shahrol Azral Ibrahim Halmi told the High Court yesterday that he went ahead with the RM5 billion Islamic medium-term notes programme as instructed by Najib.

Bernama reported Shahrol Azral as saying that he had a meeting with Najib at the latter’s residence after being summoned by Sultan Mizan to the palace.

Sultan Mizan, who was then the 13th Yang di-Pertuan Agong, “seemed angry” and asked Shahrol Azral to sign a resolution which was related to issues in the bond, including items to suspend the issuance until terms stated were fulfilled, Shahrol Azral testified yesterday.

Shahrol Azral, who is the ninth prosecution’s witness, said the resolution had been signed by Sultan Mizan’s sister, Tengku Datuk Rahimah Sultan Mahmud, a former director at TIA.

“Please sign this resolution, you can read it if you want,” Sultan Mizan was quoted as saying. Shahrol Azral said Sultan Mizan had used the phrase “unsavoury character” in that circumstance, but it was unknown who the King was referring to.

At Najib’s house, Shahrol Azral testified that the former PM said: “You go ahead, I will talk to Tuanku”.

He added that Jho Low, whose real name is Low Taek Jho, was already at the house and had a discussion with Najib.

TIA was a predecessor of 1MDB, incorporated on Feb 27, 2009, with a start-up capital of RM2. The strategic wealth fund was planned to raise RM11 billion, RM5 billion through a government-guaranteed bond and another RM6 billion by the securitisation of Terengganu state’s oil royalties.

A major conflict emerged between stakeholders of TIA had led to the transfer of ownership from the Terengganu state to the federal government.

Tengku Rahimah resigned from TIA on May 27, 2009.

Shahrol Azral said he knew the real buyers of the RM5 billion bond in 2018 when investigators showed him the money trail from the bond sale.

“I remember two entities — one based in Singapore and one based in Hong Kong. I cannot recall the names of those who had resold the bonds back to entities in Malaysia at par value. The police said the two entities belong to Jho Low,” he said.

He also disagreed with the argument that the board of 1MDB was at fault over the mismanagement of the fund.

“According to the memorandum and articles of association, the board must have written approval from the PM for any investment decision. Therefore everything that he did is in line with the wishes of the PM, Finance Minister and board of directors of 1MDB,” he said.

“I asked you a question just now: Is it the board of directors’ fault?” Sri Ram asked, in which the witness replied: I do not agree.