.jpg "Former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi is pictured at the Kuala Lumpur High Court on September 2, 2020. u00e2u20acu2022 Picture by Firdaus Latif")
KUALA LUMPUR, Sept 2 ― A former CEO of 1Malaysia Development Berhad (1MDB) today insisted in the High Court that Datuk Seri Najib Razak's words carry more weight than just as the chairman of the state-owned company’s board of advisers.
Former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi, the ninth prosecution witness in Najib's corruption and money-laundering trial over 1MDB funds, testified that the latter was not merely giving his advice when signing a 2014 note about a US$975 million (RM4.04 billion) loan that a 1MDB subsidiary later took up, as he was also wearing the multiple hats of prime minister and 1MDB's shareholder via his finance minister post.
Shahrol Azral explained his viewpoint regarding Najib's actual role by saying that he had considered himself a “civil servant” while serving as 1MDB CEO from 2009 to 2013.
He was replying questions from Najib's lawyer Wan Aizuddin Wan Mohammed today concerning an August 18, 2014 1MDB board of directors' meeting, where the directors were shown a memo sent by 1MDB director Tan Sri Ismee Ismail to Najib and which Najib had signed off with a handwritten note.
In the memo regarding the proposed US$975 million loan which Najib had signed off as the 1MDB chairman of board of advisers (CBOA), Najib had written a minute addressed to Ismee: “Tan Sri Ismee. Noted the contents with no objection.”
When asked by Wan Aizuddin if he agreed that the minute does not amount to a directive by Najib to carry out instructions, Shahrol Azral disagreed.
“I think all civil servants would agree actually there are varying degrees of instructions when a minister or prime minister minutes things. When I read this, my impression is that 'these are the things I agree with,'“ Shahrol Azral said.
Shahrol Azral agreed that he had in his mind classified himself as a civil servant while he was 1MDB CEO up until 2013 and even subsequently when he was seconded to Pemandu, stating: “Up until the time I was let go from government service in 2018, I considered myself as a civil servant.”
Highlighting that the memo that Najib had signed off contained very specific information, Shahrol Azral again insisted that this went beyond mere advice: “Again when I read this, I look at it as instructions.”
Wan Aizuddin then argued that Najib was not giving instructions as he had signed off as 1MDB's CBOA, but Shahrol Azral argued otherwise.
Wan Aizuddin: Even if we took what you said as civil servant, as CBOA, to sign as 1MDB CBOA, the company's constitution does not give him the power to make the final decision.
Shahrol Azral: The board of advisers advises, but the honourable court should remember he is also wearing the hat of finance minister, prime minister as well as the sole shareholder of 1MDB, so his words carry a lot more weight than simply adviser.
Wan Aizuddin: You agree because he is wearing several different hats under the company constitution, more the reason when he signs something he must be specific ― whether signing as prime minister, finance minister, as CBOA?
Shahrol Azral: He can choose to sign whatever that he chooses to sign, but from our perspective this is one person wearing those hats and we take his instructions as seriously as it is.
Wan Aizuddin however said that it was not really Najib's choice to sign on to the memo as 1MDB CBOA as it was in that capacity that Ismee had sent the memo to him, further arguing that 1MDB's company constitution meant that Najib as CBOA has “no power to approve anything”, but Shahrol Azral merely said “no comment”.
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During the trial today, evidence was shown in court that 1MDB subsidiary, 1MDB Energy Holdings Bhd, had in May 2014 borrowed US$250 million from Deutsche Bank, before taking out a second loan amounting to US$975 million from the same bank in September 2014.
These two loans came up to a total of US$1.225 billion. 1MDB had borrowed the money with the intention of using it to buy back the options it had given to a real entity — Abu Dhabi’s Aabar PJS Investments — to take up shares in two 1MDB subsidiaries when 1MDB was raising US$3.5 billion in funds previously to buy independent power plants.
Bank documents were also produced in court today to show that the 1MDB subsidiary had paid out a total of US$856 million from the money borrowed, to two fake companies both named as Aabar PJS Investments Limited — namely US$175 million to the fake Aabar in British Virgin Islands, and US$223.333 million and US$457,984,607 to the fake Aabar incorporated in Seychelles.
Shahrol Azral testified that the 1MDB board of directors never gave its approval for the payment of the borrowed money to the two fake companies. In 2014, he was no longer the 1MDB CEO but was still a member of the 1MDB board of directors.
Asked specifically about the US$175 million transaction, Shahrol Azral confirmed that the 1MDB board was not shown any shareholders’ resolution (which would have to be signed by Najib as finance minister for 1MDB’s shareholder MOF Inc) regarding this payment, further confirming that he had also not seen any written approval by Najib as the prime minister, as required under Article 117 of the company’s constitution for major financial decisions.
On the first day of the trial, the prosecution had said it would prove some of the funds that were transferred to the two fake Aabar entities had in 2014 allegedly made their way to Najib's bank account, namely two separate sums in pound sterling that were equivalent to RM4,093,500 and RM45,837,485.70.
Najib's trial resumes tomorrow morning before High Court judge Collin Lawrence Sequerah.
Najib's lead defence lawyer Tan Sri Muhammad Shafee Abdullah today told the judge that he expects to take only a few hours to wrap up the cross-examination of Shahrol Azral, while deputy public prosecutor Ahmad Akram Gharib said the prosecution also expects to take only a few hours to re-examine Shahrol Azral.
Shahrol Azral has spent more than 30 days on the witness stand in this case.
