1MDB trial: Najib approved proposal for RM7.3bil bridging loan, witness tells court

KUALA LUMPUR: Former prime minister Datuk Seri Najib Razak had approved the proposal for a US$1.75bil (RM7.3bil) bridging loan through the issuance of 10-year structured notes for the takeover of Tanjong Energy Holding Sdn Bhd (TEHSB).

The approval was in accordance with Section 6 of the Loans Guarantee (Bodies Corporate) Act 1965 where every further indebtedness in any form would need the approval of the Finance Minister.

Former 1Malaysia Development Bhd (1MDB) CEO Datuk Shahrol Azral Ibrahim Halmi, who is the ninth witness, was testifying in the 1MDB trial on Monday (Sept 30).

He said the approval was done by Najib, who was the then Finance Minister.

He said the approval was obtained after getting the green light from 1MDB's board of directors and 1MDB's shareholder, the Ministry of Finance Inc (MOF Inc).

"I would like to clarify that 1MDB, which was earlier known as Terengganu Investment Authority Bhd (TIA), received a federal government guarantee in May 2009. 1MDB was subjected to the Loan Guarantee Act where 1MDB could not make any new loans without the approval from the Finance Minister.

"In the issuance of bonds in 2012, I confirm that 1MDB had the written approval of the Finance Minister and (1MDB company lawyer) Jasmine Loo, who was involved in the process to obtain Najib's signature then," he said.

Shahrol, however, added that he was not involved in the process.

"I am not sure whether the bond issuance went through the proper process at the Finance Ministry or that an approval was granted by Najib in his capacity as the then Finance Minister," he added.

Najib, 66, faces 25 charges in total - four for abuse of power that allegedly brought him financial benefit to the tune of RM2.3bil; and 21 for money laundering involving the same amount of money.

He faces imprisonment of up to 20 years and a fine of up to five times the sum or value of the gratification or RM10,000, whichever is higher, if found guilty.

The trial continues before High Court judge Justice Collin Lawrence Sequerah this afternoon.