Najib approved 1MDB’s subsidiary loan totalling US$1.225b – witness


The High Court here today was told that the board of directors (BOD) of the 1Malaysia Development Berhad (1MDB) had granted approval to 1Malaysia Energy Holdings Ltd (1MEHL) to obtain two loans totalling US$1.225 billion with Deutsche Bank AG in 2014.

Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, 49, said the first loan of US$250 million was made on May 22, 2014, and the second loan of US$975 million on Aug 21, 2014, for the purpose of settlement payment of the ‘Aabar Option’.

The permission to make this loan was also approved by Datuk Seri Najib Tun Razak as a shareholder of 1MDB as well as the Minister of Finance (Incorporated).

He said this was because every 1MDB’s deal involving financial interests need to be approved by Najib first.

Shahrol Azral said this while reading his statement on the 16th day of the former prime minister’s trial involving 1MDB funds during lead examination by senior deputy public prosecutor Datuk Seri Gopal Sri Ram.

Explaining about ‘Option Aabar’, the witness testified that he was informed that 1MDB proposed the initial public offering (IPO) for the 1MDB Energy Group listing on Kuala Lumpur Stock Exchange (KLSE).

“It was known as the Option Buy Back, which is the process of redeeming the “Aabar Options” during the acquisition of the independent power producer (IPP) in 2012 as was signed by 1MDB and Aabar that was in the Option 

However, he said he was not involved in the process because in March 2013 he was transferred to Performance Management and Delivery Unit (Pemandu) and no longer held the position of the CEO of 1MDB.

“Nonetheless, I was appointed as one of the BOD in 1MDB. But during the 1MDB’s BOD meeting, whenever there was an issue or decision making on the energy sector in 1MDB, I withdrew from the meeting to avoid conflict of interest with my post in Pemandu,” he said.

Earlier, Shahrol Azral confirmed a document titled ‘Letter of approval and support (LOS)’ from Najib as the Finance Minister dated 29 August 2014, for loans of US$250 million and US$975 million for the purpose of 1MDB Energy Group IPO process on KLSE.

On the opening of a bank account owned by 1MDB Energy Holdings Ltd at Falcon Private Bank, Hong Kong on Oct 9, 2012, the witness said the bank was selected by 1MDB director Terence Geh and fugitive businessman, Low Taek Jho or Jho Low.

“I had never questioned why they chose this bank or the main purpose of the account but what I know was that the bank is owned by Aabar and this probably would facilitate the dealings of 1MDB Energy Holdings Ltd with Falcon Private Bank Limited,” he said.

When asked by Sri Ram on the purpose of the account opened at Falcon Private Bank Limited, Shahrol Azral said he did not remember.

Najib, 66, faces four charges of using his position to obtain bribes totalling RM2.3 billion from the 1MDB funds and 21 charges of money laundering involving the same amount.

The Pekan MP allegedly committed the four offences at the AmIslamic Bank Berhad branch in Jalan Raja Chulan, Bukit Ceylon here between Feb 24, 2011, and Dec 19, 2014, and the money laundering offences between March 22, 2013, and Aug 30, 2013, at the same place.

The hearing before Judge Collin Lawrence Sequerah continues Monday.