Shafee: ‘If RM5b IMTN was suspended, Malaysia’s ratings would have been affected’

KUALA LUMPUR (Sept 26): Datuk Seri Najib Razak’s senior counsel said that the suspension of the RM5 billion Islamic medium term notes (IMTN) issuance would have negatively impacted Malaysia’s ratings, which was why the former premier had decided to go on with the issuance.

Speaking to the press following the conclusion of day 13 of the 1Malaysia Development Bhd (1MDB) trial yesterday, Tan Sri Muhammad Shafee Abdullah said Najib had been told that the bonds had already been issued at that point.

“Datuk Seri Najib had been advised that the bond had already been issued to nothing less than AmInvestment, which is AmBank. You can’t recall it — you can’t even suspend it because the bond had been issued.

“That is the reason why Datuk Seri Najib advised that the bond cannot be suspended, because Malaysia’s reputation in terms of bonds, financial credibility and ratings in the international market will go down the drain,” said the lawyer.

He said that’s why Najib said to continue with the issuance but that he would speak to Terengganu’s ruler Tuanku Mizan Zainal Abidin.

Shafee also claimed that the Sultan was not angry at Najib, but was instead upset by the way TIA was being run.

“He was upset because the State sovereign fund was put to risk because there was no proper management layout and no safeguards put in place. There was no representation from Terengganu either, in the form of MB Inc or from the State.

“These are some of the elements that he was upset about and told to stop the bonds. He didn’t say ‘I don’t want to do it at all’, he said suspend it before it goes any further because the State of Terengganu was being exposed,” he said.

Yesterday, Datuk Shahrol Azral Ibrahim Halmi, the former CEO of 1MDB and the ninth prosecution witness, testified that the he was in a meeting with the Terengganu ruler and his sister Tengku Datuk Rahimah Puteri Mahmud on May 22, 2009, during which he was asked to sign a resolution for the suspension of the Islamic medium term notes (IMTN) issuance.

The witness also said that Mizan was upset and referred to an “unsavoury character”, though it is unclear whom he was referring to.