Former 1MDB CEO and defence in war of words over meaning of 'fiduciary'

KUALA LUMPUR: A key witness in the 1Malaysia Development Bhd (1MDB) trial got into a war of words with the defence over the word "fiduciary" relating to his role in the sovereign wealth fund.

Former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi, 49, had earlier told the High Court that fugitive financier Low Taek Jho, also known as Jho Low, was advising both 1MDB and PetroSaudi International Ltd (PSI) as the companies went into a joint venture (JV) in 2009.

“Jho was already advising Datuk Seri Najib Razak earlier than PSI.

"When he (Jho) called me telling he was playing the role of advisor to PSI, it was clear to me that he wanted to create a win-win for the two countries on behalf of Najib, ” the witness said here on Thursday (Oct 24).

Shafee then questioned him whether that would have constituted a conflict of interest.

“At that time, I took it that Jho was a trusted advisor of Najib and he knew to facilitate the deal.

“I didn’t go more than that. I took it in good faith and for the good of the country, that is why Najib wanted to do it (the JV), ” Shahrol said.

Shafee: Did you tell the board (about Jho advising PSI)?

Shahrol: I think I did tell.

Shafee: Was it recorded?

Shahrol: It was not recorded.

The witness explained that matters relating to Low was not recorded in meeting minutes as there were instructions to “minimise Low’s involvement on 1MDB on paper”.

This caused Shafee to question Shahrol’s duty in the company.

Shafee: You owe a duty to the board.

Shahrol: Yes.

Shafee: What kind of duty is this?

Shahrol: Fiduciary.

Shafee: What is that?

Shahrol: Involving the finances of the company.

Shafee: No! Fiduciary is a duty to be transparent and honest and act in the best interest of the board and the company. Obviously you didn't understand the word, do you understand?

Shahrol: Well, I was honest and transparent.

Shafee: Let the judge decide whether you were being honest or not. How can you not understand directors having fiduciary duty?

Shahrol: Yes, I do.

Shafee: But you didn’t know what it means.

Shahrol: The technical definition, yes.

Shafee: I’m putting to you, you don’t seem to care about your fiduciary duty to the company.

Shahrol: I disagree.

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.

The former premier 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.

The hearing before Justice Collin Lawrence Sequerah continues.