Najib agrees 1MDB to borrow RM3b from Socso

Key witness says the former PM approved the plan based on 1MDB’s minutes dated March 30, 2011, citing Socso for the 1st time in the 1MDB scandal


DATUK Seri Mohd Najib Razak agreed to a RM3 billion loan for 1Malaysia Development Bhd (1MDB) to take from Social Security Organisation (Socso) and the latter loaned it out to PetroSaudi International Ltd (PSI), the Kuala Lumpur High Court was told yesterday.

A key witness in Najib’s corruption and money-laundering trial said the former prime minister (PM) approved the plan based on 1MDB’s minutes dated March 30, 2011.

Ex-1MDB CEO Datuk Shahrol Azral Ibrahim Halmi (picture) said 1MDB would then lend PSI US$750 million (RM3.14 billion) if the former got the RM3 billion loan from Socso.

It is the first time that Socso has been cited in relation to the failed 1MDB scandal. Previously, the Retirement Fund Inc had provided a RM4 billion facility to 1MDB’s unit SRC International Sdn Bhd.

The witness did not reveal whether Sosco did provide the loan to 1MDB.

The minutes also stated that Najib wanted to focus on Maybourne Hotel Group, SRC International and the Kuala Lumpur International Financial District, now known as the Tun Razak Exchange, according to news agency Bernama.

Shahrol Azral said the Maybourne Hotel project was a Jho Low-led hotel takeover bid in London.

He also said the Maybourne Hotel project was never planned or discussed by the board and the minutes were prepared by the fugitive businessman Jho Low, whose real name is Low Taek Jho.

“I believe that Jho Low just wanted to use the 1MDB name for the hotel bid,” Shahrol Azral said on the 14th day of the proceeding.

He said PSI co-founder and CEO Tarek Obaid had written a letter to Najib on Feb 18, 2011, requesting for an additional US$750 million loan through Murabahah notes.

He, however, said after several discussions between him and Jho Low, between April and May 2011, PSI agreed to reduce the drawdown request from the 1MDB-PetroSaudi Ltd (joint-venture company) to US$330 million on May 12, 2011.

He also said PSI was very disappointed and dissatisfied when the amount requested had been reduced from US$330 million to US$205 million.

“Jho Low said, ‘they complained to daddy’, which means Prince Turki Abdullah has informed the (late) King Abdullah (Abdulaziz Al Saud). I was also informed by Jho Low that there had been talks between Najib and King Abdullah on the issue as the US$330 million had already been agreed prior.

“I then had to comply and ordered the final tranche of US$125 million to PSI,” he said during examination-in-chief by lead public prosecutor Datuk Seri Gopal Sri Ram.

Shahrol Azral said the total amount of funds injected by 1MDB into PSI and Good Star Ltd, a vehicle allegedly owned by Jho Low, was US$1.83 billion.

Of the total, US$500 million and US$330 million channelled to PSI were from syndicated bridging loans worth RM2.5 billion made with AmBank (M) Bhd and Standard Chartered Bank Malaysia Bhd.

On a separate matter, Shahrol Azral said former 1MDB CEO Arul Kanda Kandasamy had advised the board not to speak to the media when the 1MDB scandal made headlines in 2015.

Sri Ram: What were the media reports about?

Shahrol Azral: If I remember correctly, they were focused on first US$700 million that was transferred by me to Good Star, where Jho Low was the ultimate beneficiary of that company.

Sri Ram: Did the board members speak to the media?

Shahrol Azral: I don’t recall any instance when any member of the board spoke publicly. The questions would have come from the National Audit Department, the Public Accounts Committee and any party within the government only.

Shahrol Azral was 1MDB’s first CEO. He was appointed on March 23, 2009, while Arul Kanda was appointed in 2015.