Defence in 1MDB-Tanore trial accuses Shahrol of deceiving Najib about US$1b PSI deal

KUALA LUMPUR (Oct 18): The lead defence counsel in the 1Malaysia Development Bhd-Tanore (1MDB-Tanore) had yesterday accused a witness of lying to Datuk Seri Najib Abdul Razak about a US$1 billion investment into a joint venture with PetroSaudi International Ltd (PSI).

Tan Sri Muhammad Shafee Abdullah said former 1MDB chief executive officer (CEO) Datuk Shahrol Azral Ibrahim Halmi had deceived Najib, who was chairman of 1MDB’s board of advisers (CBOA), by saying that the board of directors had approved a proposal to invest with PetroSaudi International Ltd (PSI) in a 2009 meeting between the both of them.

The four-eyed meeting followed another meeting by the board of directors in July that year when it was decided that the management will i) explore an investment with PSI, ii) to look into the legal implications and iii) to seek the advice of the CBOA on the investment.

“(The board of directors) asked you to go and seek the advice of the CBOA ... (but) you and Jho Low misled the CBOA because you said ‘consistent with the approval of the board’.

“The board of directors has never approved! This is a lie!” argued Shafee.

Shafee also recalled fraudulent minutes of a CEO-CBOA meeting in 2011, which never occurred.

Shahrol has testified that he willingly signed the minutes — that was brought to him by Jho Low — despite not understanding the content.

“You signed a document and you did not tell the truth because you signed under ‘recorded by Shahrol’. You were willing to put your signature on an untruthful document,” said Shafee.

Shahrol admitted lying about the 2011 meeting, but responded that he signed the minutes because Najib’s signature was there, and because he believed that Jho Low was working under the instruction of the former premier.

“I am telling you, you got this upside down,” argued Shafee. “This is where 1MDB went down the drain. (By law) the board of directors, must make, the decision first. Then the PM can overrule,” said Shafee.

However, Shahrol said while the distribution of power “is fine in black and white, but in practice, it did not happen that way”.

“For example the PSI transaction, if it has not been rushed, would we have gone for transaction? No ... In working closely with PM, we had to follow according to his wishes,” he said.

Shafee had earlier argued that the witness misinterpreted the fund’s Memorandum and Articles of Associations (M&As), leading him to misunderstand Najib’s role in 1MDB.

The lawyer referred to a section in the M&A which showed that decision-making powers in 1MDB still resided in the hands of the board of directors, as they were not duty-bound to seek the advice of the CBOA.

He also argued that there was no document to show Najib ever invoking Article 117 — a provision that allows the PM to veto the board of directors — to force 1MDB’s hands, such as to collaborate with PSI in 2009.

He raised this to counter Shahrol’s earlier testimony that some of 1MDB’s corporate decisions were made during meetings between himself (as CEO) and Najib (as CBOA).

Fugitive businessman Low Taek Jho had arranged these meetings, prepared the minutes, and informed Shahrol that the content had been pre-agreed with Najib, he said.

Najib is currently facing 25 criminal charges for the alleged embezzlement of billions of ringgit in 1MDB funds. The trial continues.

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