KUALA LUMPUR, Nov 18 — Any directors of the government-owned 1Malaysia Development Berhad (1MDB) would probably have to give up their positions if they had said "no” to what the prime minister Datuk Seri Najib Razak wanted, the High Court heard today.

Tan Sri Ismee Ismail, a former director in 1MDB, today appeared to suggest that 1MDB board members would not be able to disagree with Najib’s request.

Ismee was testifying as the 13th prosecution witness in Najib’s trial involving money laundering and power abuse charges in relation to more than RM2 billion of funds misappropriated from 1MDB.

Lead prosecutor Datuk Seri Gopal Sri Ram today zoomed in on the 1MDB board’s September 26, 2009 meeting, where Low Taek Jho — popularly known as Jho Low and seen by Ismee as Najib’s adviser for 1MDB — was present and had handed over his handphone to 1MDB chairman Tan Sri Mohd Bakke Salleh.

Yesterday, Ismee said Bakke had then informed everyone at the meeting that "PM call” and left to take the call, and that Bakke had returned several minutes later and informed the board that he had just spoke to Najib who wanted the board to speed up its decision on a proposed joint venture with PetroSaudi International Ltd (PSI).

Despite having only been shown the proposal paper for the 1MDB-PSI joint venture idea just days earlier in a September 18, 2009 1MDB board meeting, the 1MDB directors had at the September 26 meeting agreed to approve the joint venture despite reservations and despite having wanted more studies to be carried out first, Ismee had said yesterday.

Datuk Seri Gopal Sri Ram arrives at the Kuala Lumpur High Court February 10, 2021. — Picture by Shafwan Zaidon

Today, Sri Ram asked Ismee if the 1MDB board members could have said no.

Sri Ram: My question to you is, when Tan Sri Bakke told the meeting that the prime minister wants us to go ahead, were you in a position as a member of the board to say no?

Ismee: I guess at that time, I guess if the board members say no to the wishes of the prime minister, I guess we just have to leave as board members.

Ismee went on to explain how the proposed 1MDB-PetroSaudi deal was seen as a government-to-government deal then between the Malaysian government and the Saudi Arabian government.

"I think if I can recall correctly at the moment of time in 2009, when Datuk Seri Najib had just recently become prime minister, the perspective on my part, the excitement, the expectation was high, and I believed we wanted to do the deal to fulfil the prime minister’s wishes.

"So that’s why due to the urgency, we tried to put all the conditions to ensure the G2G is really airtight, so that is the position I believed the board took then.

"And personally in 2009, being CEO of Tabung Haji, I’m very sensitive about the relationship to the Saudi government. That time pun, I myself felt excited, we can enhance the relationship between Malaysia and Saudi,” he said.

Tabung Haji is a fund for Malaysia’s Muslim pilgrims, while holy sites for Muslim pilgrimages are located in Saudi Arabia.

Ismee agreed with Sri Ram however that the conditions that the 1MDB board had set for the joint venture had not been met and had been violated.

As for the funds that were taken out of 1MDB, Ismee confirmed that he did not receive any of these funds and further confirmed that he had not received any money from Low.

Yesterday, Ismee had also said the 1MDB directors might have asked the 1MDB management to postpone the joint venture to enable further studies to be carried out instead of approving it on September 26, 2009, if Najib had not intervened and given instructions to Bakke and the 1MDB board at that meeting.

Ismee had yesterday also said the 1MDB board of directors does have the powers to stop or reject the proposed joint venture with PSI but noted that the chairman of 1MDB’s board of advisers — who was Najib as the prime minister then — has the powers under the 1MDB company constitution’s Article 117 to override their decision and could also appoint new directors if dissatisfied with any of the directors.

Article 117 of 1MDB’s company constitution states that the prior written approval of the prime minister was required for any amendments to the M&A, for the appointment and removal of the company’s directors and senior management team.

According to Article 117, the prime minister’s prior written approval was also required for any financial commitments by 1MDB, including investments or other matters likely to affect government guarantees, national interests, national security or government policies, with the government to make the "final and conclusive” decision on what amounts to national interests, national security and national policies.

Among other things, Ismee had yesterday also said that the 1MDB board had — after hearing Najib’s wishes via Bakke — then tried to find the best way to protect the company’s interest while carrying out the joint venture by imposing conditions on the joint venture company.

Based on the September 26, 2009 meeting minutes, the 1MDB board had instructed the 1MDB management to carry out several steps, including to ensure that US$1 billion that 1MDB was pumping into the joint venture be sent to the joint venture company.

But at the next 1MDB board meeting on October 3, 2009, the board found out that its instructions had not been complied with.

The October 3 meeting minutes recorded the 1MDB board as raising multiple concerns, including the board not being consulted of the change of plans such as the US$1 billion not being sent to the joint venture company and with US$700 million of that amount instead already sent to PSI’s alleged "affiliate” Good Star Limited.

Ismee yesterday said the 1MDB board disagreed with the US$700 million having been sent to Good Star, and said the board was disappointed with 1MDB management ignoring the board’s previous instructions.

Ismee said none of the 1MDB directors knew then that the US$700 million that 1MDB had paid had went into a bank account owned by Low.

Ismee also said yesterday that Bakke had instructed then 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi to go to London to meet PSI and seek to have the money returned.

Ismee yesterday said Bakke was very angry at the meeting as the joint venture was not carried out according to the previous approval by the 1MDB board and as several insertions into the joint venture agreement did not seem right and there seemed to be hidden matters.

"But once again we had to be careful since we wished to take care of the G2G ties told to us,” he had said yesterday.

Shahrol had previously testified that PSI officials refused to return the US$700 million and that Bakke had remained dissatisfied when Shahrol provided updates in a 1MDB board meeting on October 10, 2009.

Bakke later resigned as 1MDB director on October 19, 2009, with Shahrol having told the court that this could be possibly due to his dissatisfaction with what had happened during the joint venture.

The prosecution had on Day One of Najib’s 1MDB trial said that it will prove Good Star is a company owned and controlled by Low, and had also said it will show that US$20 million of the US$700 million sent to Good Star eventually ended up allegedly with Najib.

Najib, who has to be physically present in his trials in order to ensure a fair trial, is expected to be in Singapore from November 21 to December 5 to visit his daughter and her newly-born child.

The 1MDB trial before High Court judge Datuk Collin Lawrence Sequerah is expected to resume on December 13, with Najib expected to have completed his quarantine upon his return from Singapore by then.