1MDB’s US$700m went into Jho Low’s company in 2009, BNM only knew in 2015 – Zeti

KUALA LUMPUR – The High Court here today was told that only after nearly seven years, Bank Negara Malaysia (BNM) found that US$700 million belonging to 1Malaysia Development Berhad (1MDB) went into the wrong entity, namely Good Star Ltd, a company owned by fugitive businessman Low Taek Jho or Jho Low.

Former Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz (picture), 76, also admitted that it took a long period to discover the matter as it was a lengthy process to follow the money trail.

The 46th prosecution witness said this when asked by Datuk Seri Najib Tun Razak’s lead counsel Tan Sri Muhammad Shafee Abdullah at the former premier’s trial involving the misappropriation of RM2.3 billion of 1MDB funds.

The court had been told earlier that the US$700 million transaction occurred in 2009 and the authorities discovered it in 2015.

Muhammad Shafee: Tan Sri, only after nearly seven years, all authorities realised that the money went into Jho Low’s entity? Zeti replied: “correct”.

Muhammad Shafee: It was not a long period to discover that the money went into the wrong entity?

“It is very common. I was told by financial authorities all over the world that it takes many years to uncover and detect such wrongdoings.

“Yes, the transaction occurred in 2009 and we found out in 2015, but it doesn’t mean that BNM didn’t do any follow-up. We have sent several letters and emails to 1MDB. We asked about the status of the US$1 billion investment.

“But, none was forthcoming and that was why, in 2014, when 1MDB applied for more money, BNM rejected its application because the indebtedness kept on increasing, therefore, the central bank rejected its application,” Zeti said. 

She added that the central bank had to undertake a multi-year investigation after 1MDB officials failed to provide satisfactory answers on what happened to the funds sent overseas in 2009.

Muhammad Shafee: Tan Sri, BNM could have determined the owner of the account before the approval of the transaction?

Zeti: No, it is another jurisdiction and it takes time to find out who is the owner.

She also pointed out that it was not the BNM’s role to conduct due diligence on the transaction and that it is clearly the function of the financial institution.

Najib, 70, faces four charges of using his position to obtain bribes amounting to RM2.3 billion belonging to 1MDB and 21 charges of money laundering involving the same amount.

The trial before Judge Datuk Collin Lawrence Sequerah continues. – BERNAMA