Shahrol denies receiving US$1m from ex-Goldman banker Tim Leissner

KUALA LUMPUR (Oct 7): Datuk Shahrol Azral Ibrahim Halmi, former CEO of 1Malaysia Development Bhd (1MDB), has denied receiving US$1 million from former Goldman Sachs banker Tim Leissner in relation to the issuance of the US$1.75 billion 1MDB bond by the US investment bank in 2012 for the acquisition of Genting Sanyen Power Sdn Bhd.

Shahrol, who is testifying against former prime minister Datuk Seri Najib Razak in the 1MDB-Tanore trial, denied the allegations that was put to him by Najib's lead defence counsel Tan Sri Muhammad Shafee Abdullah.

At the High Court today, Shafee cited a court document by the US Department of Justice (DoJ) mentioning an individual called "1MDB Officer 2", which referred to 1MDB's CEO in 2009-2013 - a description that fits Shahrol.

He then recalled the hearing of Leissner in the US in November 2018, where the Goldman Sachs Asia partner pleaded guilty to conspiring to launder money and to violating anti-bribery law over funds misappropriated from 1MDB and paying bribes to various Malaysian and Abu Dhabi officials.

Leissner, said Shafee, referred to "Project Magnolia" where funds were misappropriated into shell companies with 1MDB Officer 2 as beneficiary.

Shahrol: I was not aware of that. I do not have any shell companies that I'm the beneficial owner of.

Shafee: Remember Project Maximus? Tim Leissner says around July 29, 2013, he paid 1MDB Officer 2 US$1 million to an account controlled by you.

Shahrol: Not true. Are you sure that 1MDB Officer 2 was not referring to [1MDB general counsel] Jasmine Loo?

In November 2009, Leissner and fugitive financier Low Taek Jho acted as matchmakers for Najib and then Goldman Sachs CEO Lloyd Craig Blankfein to discuss partnerships with 1MDB. The investment bank went on to issue three bonds totalling US$6.5 billion for 1MDB in 2012-2013, which cost 1MDB US$600 million or over 9% in fees and commissions.

In the DoJ document, "Project Magnolia" referred to the first bond worth US$1.75 billion that was issued to part-finance 1MDB's acquisition of Tanjong Energy Holding Sdn Bhd. Goldman Sachs made US$192.5 million for the exercise.

Meanwhile "Project Maximus" referred to the second bond worth US$1.75 billion that was issued to part-finance 1MDB's acquisition of Genting Sanyen. Goldman Sachs earned US$114 million from that deal alone.

After several exchanges, Shahrol continued to deny the allegations.

Shahrol: Unless you get the person that wrote the report that 1MDB Officer 2 refers to me, I don't think it is fair to refer to me as 1MDB Officer 2. Nobody ever paid me anything for these dark schemes.

Shafee: Maybe we can ask the IO (Investigation Officer), because the MACC has gone to the US.

Shahrol: Then I'm not the right person to ask.

Shafee: I'm just giving you this opportunity to rebut.

Shahrol: Consider it rebutted.

Najib is currently facing 25 counts of money laundering and abuse of power for the alleged embezzlement of billions of ringgit in 1MDB funds. The trial continues tomorrow.

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