KUALA LUMPUR: As it was fully owned by the Finance Ministry, massive debt amassed by 1Malaysia Development Bhd (1MDB) had to be borne by the government, says a key witness in Datuk Seri Najib Razak’s trial.
Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, 49, told the High Court the debt amounted to RM30bil.
He was under examination-in-chief by lead prosecutor Datuk Seri Gopal Sri Ram yesterday.
Sri Ram: After you left 1MDB in 2013, who bore the debt of RM30bil?
Shahrol: The debt was borne by the Finance Ministry and the Federal Government as it was fully owned by the ministry.
Sri Ram: Can you explain the types of debt included in the RM30bil?Shahrol: The debt included a RM5bil bond issued by 1MDB and guaranteed by the ministry, and a US$3.5bil bond jointly guaranteed by International Petroleum Investment Company (Ipic) together with the ministry.
The witness said the joint guarantee meant that if there was a dispute, 1MDB would have to pay upfront and if it failed to do so, the bond holder could apply for an Ipic guarantee.
“Ipic would then make a claim of the money from the ministry to pay the bond holder,” he said.
Shahrol said Ipic had made such claims before and it was raised in a board meeting at 1MDB.
“But I do not remember the exact date. It was either in 2015 or 2016,” he added.
The court also heard how Shahrol was ordered to move to Pemandu’s Oil & Gas and Energy and Financial Services portfolio on March 15, 2013.
Shahrol was originally appointed as 1MDB’s precursor Terengganu Investment Authority Bhd (TIA) CEO in March 2009, and continued serving as the CEO of the embattled sovereign investment fund after its name changed to 1MDB.
After his removal, the post was taken over by Mohd Hazem Abd Rahman.Shahrol said he suspected he was forced out for raising his concerns on the rushed financial transactions in 1MDB.
“However, I stayed on the 1MDB board of directors at the time, with Low Taek Jho explaining that it was to help ‘manage optics’,” he said.
He added that though he was on the board, whenever a meeting was held in regards to 1MDB’s involvement in the energy sector, he would withdraw to avoid conflict of interest with his role in Pemandu.
“After the furore regarding the 1MDB issue between 2015 and 2016, the 1MDB board unanimously suggested that former prime minister Datuk Seri Najib Razak should resign, though we were ordered to stay on until a new board was elected in 2016,” he said.
The witness said he eventually left the board in 2016 following the formation of a new board.
Yesterday, Shahrol finished reading his 270-page witness statement, which he had been reading on the stand since last Monday.
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 if found guilty.
Shahrol is expected to be cross-examined by Najib’s defence team before High Court judge Justice Collin Lawrence Sequerah next Monday.
Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, 49, told the High Court the debt amounted to RM30bil.
He was under examination-in-chief by lead prosecutor Datuk Seri Gopal Sri Ram yesterday.
Sri Ram: After you left 1MDB in 2013, who bore the debt of RM30bil?
Shahrol: The debt was borne by the Finance Ministry and the Federal Government as it was fully owned by the ministry.
Sri Ram: Can you explain the types of debt included in the RM30bil?Shahrol: The debt included a RM5bil bond issued by 1MDB and guaranteed by the ministry, and a US$3.5bil bond jointly guaranteed by International Petroleum Investment Company (Ipic) together with the ministry.
The witness said the joint guarantee meant that if there was a dispute, 1MDB would have to pay upfront and if it failed to do so, the bond holder could apply for an Ipic guarantee.
“Ipic would then make a claim of the money from the ministry to pay the bond holder,” he said.
Shahrol said Ipic had made such claims before and it was raised in a board meeting at 1MDB.
“But I do not remember the exact date. It was either in 2015 or 2016,” he added.
The court also heard how Shahrol was ordered to move to Pemandu’s Oil & Gas and Energy and Financial Services portfolio on March 15, 2013.
Shahrol was originally appointed as 1MDB’s precursor Terengganu Investment Authority Bhd (TIA) CEO in March 2009, and continued serving as the CEO of the embattled sovereign investment fund after its name changed to 1MDB.
After his removal, the post was taken over by Mohd Hazem Abd Rahman.Shahrol said he suspected he was forced out for raising his concerns on the rushed financial transactions in 1MDB.
“However, I stayed on the 1MDB board of directors at the time, with Low Taek Jho explaining that it was to help ‘manage optics’,” he said.
He added that though he was on the board, whenever a meeting was held in regards to 1MDB’s involvement in the energy sector, he would withdraw to avoid conflict of interest with his role in Pemandu.
“After the furore regarding the 1MDB issue between 2015 and 2016, the 1MDB board unanimously suggested that former prime minister Datuk Seri Najib Razak should resign, though we were ordered to stay on until a new board was elected in 2016,” he said.
The witness said he eventually left the board in 2016 following the formation of a new board.
Yesterday, Shahrol finished reading his 270-page witness statement, which he had been reading on the stand since last Monday.
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 if found guilty.
Shahrol is expected to be cross-examined by Najib’s defence team before High Court judge Justice Collin Lawrence Sequerah next Monday.
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