Witness: 1MDB not allowed to engage in loan agreement without Najib's okay

  • Nation
  • Monday, 30 Sep 2019

KUALA LUMPUR (Bernama): The High Court here has heard that 1Malaysia Development Bhd (1MDB) was not allowed to engage in any more loan agreements after May 2009 without Datuk Seri Najib Razak’s approval.

Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, 49, said this on Monday (Sept 30), on Day 15 of the trial of the former prime minister’s case involving 1MDB.

Shahrol said after the Terengganu Investment Authority Berhad (TIA), that was later morphed into 1MDB, received the federal government guarantee in May 2009,1MDB was subject to the Loan Guarantee (Bodies Corporate) Act 1965 where 1MDB could not engage in any new loan agreements except with the approval of the Finance Minister.

“In the issuance of the US$1.75bil (RM7.33bil at current rates) bond in 2012, I confirm that 1MDB received a written approval from the Finance Minister.

“Jasmine Loo (1MDB's lawyer) was involved in the process of obtaining Datuk Seri Najib’s signature at the time.

“I was not involved in any dealings with the Finance Ministry to obtain the approval. I am not sure whether the issuance of the bond was carried following the due process or otherwise until it was approved by Datuk Seri Najib in his capacity as finance minister, ” said Sharol, the ninth prosecution witness.

He said Najib had approved the proposed RM6.17bil loan on the acquisition of Tanjong Energy Holding Sdn Bhd (TEHSB) by 1MDB's subsidiary, 1MDB Energy Sdn Bhd.

Shahrol confirmed this when referring to a letter from the former prime minister to him dated March 26,2012, regarding the approval of the loan during examination-in-chief by senior deputy public prosecutor Datuk Seri Gopal Sri Ram.

“This is a letter of approval from Datuk Seri Najib in his capacity as finance minister to approve the RM6.17bil bridging loan and US$1.75bil 10-year notes in connection with the acquisition of TEHSB.

“This approval is in accordance with the Loan Guarantee (Bodies Corporate) Act 1965. This is because all further indebtedness in any form must be approved by the Finance Minister first.

“Loan approval must be obtained after receiving the internal approval from the 1MDB board of directors (BOD) and shareholder which is Minister of Finance Incorporated (MOF Inc) (Datuk Seri Najib), ” he said this when reading his witness statement.

Shahrol said that he also signed a loan facility agreement obtained by 1MDB Energy Sdn Bhd from Maybank Investment Bank Bhd and RHB Investment Bank Bhd worth RM6.17bil dated May 17,2012.

“This agreement was made between 1MDB Energy Sdn Bhd and Maybank Investment Bank Bhd as well as the RHB Investment Bank Bhd as ‘Joint Mandated Lead Arrangers’ and the ‘Financial Institutions Set Out in the First Schedule’ as lenders and with Maybank Investment Bank Bhd as the lending agent for the loan facility.

“The purpose of the RM6.17bil loan was for the acquisition of TEHSB's 100 per cent equity by 1MDB through its subsidiary, 1MDB Energy Sdn Bhd, ” the prosecution's key witness said.

Najib, 66, faces four counts of using his position to obtain RM2.3bil in 1MDB funds and 21 counts of money laundering involving the same amount of money.

The Pekan MP was charged with four counts of corruption at the AmIslamic Bank Berhad Branch, Jalan Chulan, Bukit Ceylon here between Feb 24,2011 and Dec 19,2014 while all the money laundering offences were alleged to have been committed between March 22,2013 and Aug 30,2013, at the same place.

The hearing is before Justice Collin Lawrence Sequerah. – Bernama

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