PUTRAJAYA, March 4 — Sovereign investment firm 1Malaysia Development Berhad (1MDB) would not have been able to borrow US$975 million from a bank in 2014, if then finance minister Datuk Seri Najib Razak had not signed off his approval on behalf of the company’s shareholder, the High Court heard today.
Former 1MDB chairman Tan Sri Che Lodin Wok Kamaruddin, 75, said this while testifying as the 12th defence witness for Najib in the latter’s trial, where more than RM2 billion of 1MDB’s money allegedly entered the then prime minister’s personal bank accounts.
The prosecution today suggested that the 1MDB’s board of directors had signed a resolution on August 21, 2014 to accept the US$975 million loan from Deutsche Bank, because Najib had already signed resolutions dated the same day for 1MDB’s shareholder Minister of Finance (MoF) Incorporated to approve the borrowing.
But Lodin disagreed with this suggestion.
Deputy public prosecutor Kamal Baharin Omar then asked if 1MDB subsidiary 1MDB Energy Holdings Limited’s (1MEHL) agreement to take up the US$975 million bank loan could not have been done without Najib’s signing of the two shareholder resolutions (known in this case as P563 and P564), and Lodin agreed.
Kamal Baharin: Without P563, P564, Datuk Seri Najib’s approval, that agreement cannot be continued?
Lodin: Cannot. Correct.
Previously, the prosecution said documents and evidence produced in the 1MDB trial showed that RM40,477,420.70 or RM40.47 million originating from the US$975 million loan to 1MEHL ended up in Najib’s personal AmIslamic bank account in late 2014.
Kamal Baharin also asked if 1MDB’s projects could not be done without the actions that Najib had taken, namely signing off on resolutions on behalf of the company’s sole shareholder, the Minister of Finance Inc, and making notations on documents regarding 1MDB matters.
Lodin confirmed the company constitution does require the shareholder to grant approval to certain 1MDB matters, and said its board had left it to the management to fulfil all that was required under the company constitution.
Lodin also denied that he was actually a proxy to Najib in 1MDB.
Najib’s lead lawyer Tan Sri Muhammad Shafee Abdullah was expected to question Lodin at this point, but told the court that he could not do so due to “technical hiccups”, which caused delays in the defence receiving the court’s recordings of the 1MDB trial proceedings, which in turn delayed the transcript needed for his team to prepare to reexamine this particular witness.
Shafee suggested that the 1MDB trial continue tomorrow morning instead with Lodin’s reexamination as his team did not have any other witness ready to testify today.
According to Shafee, the team wanted two 1MDB’s ex-lawyers to testify in court, but 1MDB had yet to give clearance or permission for these lawyers to waive their client-solicitor privilege.
Shafee said the 1MDB chairman, namely Treasury secretary-general Datuk Johan Mahmood Merican, would be the one who can give the waiver for 1MDB.
Shafee said he had contacted Deputy Public Prosecutor Ahmad Akram Gharib about three weeks ago and gave him a letter requesting 1MDB to grant a waiver for the witnesses offered by the prosecution to the defence.
Akram said the prosecution had on February 18 sent a letter to 1MDB, while attaching Shafee’s letter to the company.
Akram also said 1MDB had to discuss this in a board meeting.
Trial judge Datuk Collin Lawrence Sequerah then asked if the court would have to wait for the board meeting before the trial could proceed.
Akram said he was informed by 1MDB’s lawyer that the reply letter is ready, adding that he was told this morning that the reply letter would be signed by 1MDB’s chairman today.
“If it’s not done today, let me know tomorrow so I can make whatever necessary orders at my disposal to expedite the trial, because I don’t think I’m very keen to wait for anyone there to put pen to signature, to hold up this trial which is of public interest,” Sequerah replied.
Shafee said he expects to complete reexamination of Lodin tomorrow morning, with one other defence witness ready to testify tomorrow and that attempts would be made to get another witness to be on standby.
Separately, 1MDB had previously applied to strike off Najib’s subpoenas of two 1MDB company secretaries to come and testify as his defence witnesses in this 1MDB trial and to bring all 1MDB board meeting minutes from 2018 to 2024 to court.
Those two 1MDB company secretaries have yet to testify in court.
1MDB had argued that the company’s board meeting minutes are privileged documents, and that these documents that Najib wants to access are irrelevant to his charges in this trial, and described his attempt as a “fishing expedition” and an abuse of court process.
Najib’s lawyers have yet to present their arguments in court to respond to 1MDB’s application, and the High Court is scheduled to continue hearing the subpoena striking-out application on March 12.
