Most of 1MDB funds raised for TRX, Bandar Malaysia projects, diverted to PSI, Court told


The High Court here was told today that most of the funds raised by sovereign wealth fund 1Malaysia Development Berhad (1MDB) for the Tun Razak Exchange (TRX), and Bandar Malaysia development projects, had instead gone to PetroSaudi International Ltd (PSI).

Former 1MDB chief executive officer, Datuk Shahrol Azral Ibrahim Halmi (picture) said the plan was for 1MDB to raise RM5 billion and RM10 billion through bridging loan facilities for the TRX (also known as the Kuala Lumpur International Financial District), and Bandar Malaysia projects respectively.

However, only RM5 billion was raised, while “the RM10 billion for the airport land redevelopment was never raised”.

Further, “only a very tiny proportion was used for TRX”, the ninth witness for the prosecution said, adding,”The money mostly went to PSI for additional tranches for the Murabaha agreement we spoke about earlier”.

The 49-year-old witness said this during cross-examination by lawyer Tan Sri Muhammad Shafee Abdullah on the 30th day of trial in the 1MDB corruption case against former prime minister Datuk Seri Najib Tun Razak.

When asked by Muhammad Shafee if Najib had ever said that he knew for a fact, who specifically was the owner of PSI, the witness replied “Najib never said that”.

To a further question on whether Shahrol Azral expected Najib, in his capacity as shareholder, to conduct due diligence, the former said “In general, yes. But in this situation, my perception was that Najib had personally invested in this relationship, had met up with Prince Turki (of Saudi Arabia) on a holiday. I cannot say one way or the other, if the prime minister would have the capacity to do due diligence”.

Pressed further by Muhammad Shafee on whether someone professional should have been performing the due diligence such as 1MDB itself, the witness agreed.

The court also heard that despite 1MDB holding a 40 percent share in a joint-venture with PetroSaudi Holdings (Cayman) Ltd, the latter had full control of the joint-venture vehicle.

Shahrol Azral said PetroSaudi had simply dismissed 1MDB’s numerous requests for information and to hold board meetings for the joint-venture company.

Najib, 66, faces 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 hearing before Judge Collin Lawrence Sequerah continues tomorrow, with senior deputy public prosecutor and former Federal Court judge Datuk Seri Gopal Sri Ram leading the prosecution.