KUALA LUMPUR (Oct 1): In his testimony yesterday, former 1Malaysia Development Bhd (1MDB) CEO Datuk Shahrol Azral Ibrahim Halmi told the court of several occasions whereby approvals for the ventures of the troubled state investment fund were fast tracked, obtaining approvals within a matter of days.
One such occasion was when 1MDB had to obtain a letter of support from the Ministry of Finance (MoF) for a US$6 billion bond issuance — which was later lowered to US$3 billion — with the proceeds to be injected into 1MDB Global Investments Ltd (1MDBGIL).
1MDBGIL was a 50:50 joint venture (JV) company between 1MDB and Aabar Investments PJS for the purpose of investment in Kuala Lumpur International Financial District — now known as Tun Razak Exchange (TRX).
Shahrol, the ninth prosecution witness in the trial, wrote a letter dated Jan 15, 2013 to Datuk Seri Najib Razak — the accused in the 1MDB-Tanore, facing 25 charges of abuse of power and money laundering in relation to billions of ringgit from the fund — who was serving as the Finance Minister and Prime Minister at the time.
The letter outlined the need for the letter of support from the ministry to enable the US$3 billion bond issuance.
The letter was delivered by hand to the former premier on the same day with the help of 1MDB legal counsel Jasmine Loo, and Najib immediately minuted a response to Tan Sri Dr Mohd Irwan Serigar, who was then the Treasury secretary-general, for the matter to be addressed urgently.
“There is a note on this letter to the Treasury sec-gen. Did this have any effect on the Treasury? Did they act immediately? Or did they drag their feet as usual?” asked senior deputy public prosecutor (DPP) Datuk Seri Gopal Sri Ram.
“They called for a meeting immediately for 1MDB to brief them on what was requested and needed. It was followed up by a series of meetings which I did not participate in. The meetings were attended by the working team at 1MDB and MoF,” Shahrol said.
The witness testified that Low Taek Jho, otherwise known as Jho Low, had told him previously that “boss will bulldoze, don’t worry”.
He was referring to Najib, who as Finance Minister and Prime Minister, would ensure that the letter of support would be issued quickly.
“So, I was confident and believed in what Jho Low said, because what he had said was in line with what had happened. Everything had been arranged and indeed that is the case that Najib wanted it expedited,” he said.
The letter was issued on March 14, 2013, within two months of the former premier’s note to the Treasury.
Shahrol explained that the original US$6 billion bond value was cut in half due to time constraint, which had resulted in the inability to negotiate the terms of the letter of support and what was required from both governments – Malaysia and Abu Dhabi – to raise the US$6 billion.
Raising US$3 billion would enable them to meet the deadline for the signing of the agreement, which was on March 13, 2013.
Meanwhile, the director’s circular resolution (DCR) to approve the raising of funds was signed by the board on March 12, 2013 — merely a day before the deadline.
While the witness did not say as to why there were time constraints, he had earlier testified that there was a “sense of speed and urgency” that was injected by Jho Low into an earlier dealing, which caused 1MDB to transfer US$577 million into Aabar Investment PJS Ltd, a company that was not owned by the International Petroleum Investment Company (IPIC), but in fact was controlled by Jho Low.
Genting Sanyen acquisition
One year earlier, 1MDB also saw the fast-tracking of approvals for the acquisition of Mastika Lagenda Sdn Bhd — the holding company of independent power producer Genting Sanyen Power Sdn Bhd — by 1MDB Energy (Langat) Ltd (1MELL), which was rushed to ensure it was completed before the 13th General Election, so Najib would be able to attend to the acquisition before he was busy campaigning for the election, which was set for May 5, 2013.
On Aug 3, 2012, Najib agreed to the proposal for a loan facility not exceeding RM1 billion and US$1.75 billion 10-year notes, out of which RM2.75 billion would be used for the Genting Sanyen acquisition. The letter was required as any taking of debt by 1MDB required the approval of the MoF.
A week later on Aug 10, 2012, the resolution for the takeover was approved by the board of directors via a DCR, with Najib also approving the transaction as the shareholder of 1MDB.
Three days later on Aug 13, the sale and purchase agreement between 1MDB, Genting Power (M) Ltd and Genting Power Holdings Bhd was signed by Shahrol.