‘No way I’d be 1MDB CEO’

KUALA LUMPUR: A key witness in the 1Malaysia Development Bhd (1MDB) trial told the High Court he would have resigned immediately if he was made CEO again.

Datuk Shahrol Azral Ibrahim Halmi, 49, said this during cross-examination by lead counsel Tan Sri Muhammad Shafee Abdullah who asked him if he would investigate fugitive financier Low Taek Jho and 1MDB executive director Casey Tang if he was appointed again.

The two individuals are said to be untruthful in the transactions involving 1MDB’s joint venture (JV) with PetroSaudi International Ltd (PSI).

“Hypothetically, if I can go back and be the CEO of 1MDB, I would probably resign on the spot, ” he said here yesterday.

Shahrol, who is currently unemployed, said it was impossible to know the truth behind the JV then.

“Back then, I could not have possibly known how much truth was being told to me by Jho and Casey about the whole 1MDB-PSI JV, including the diversion of US$700mil meant for the venture, ” he said.

The witness said he believed 1MDB was a strategic vehicle for former prime minister Datuk Seri Najib Razak and as an employee, he had wanted to serve Najib well.

The court was told that the board of directors at 1MDB was not informed of the decision to split a US$1bil funding meant for the 1MDB-PSI JV into US$300mil and US$700mil.

The bigger portion of US$700mil eventually went to Good Star Ltd, a company that was initially represented as a PSI subsidiary but later revealed to be owned by Low, or better known as Jho Low.

Shahrol said a consent from the board was not obtained before the split due to time constraints and the urgency to “get things done”.

He testified that based on a Director’s Circular Resolution (DCR), the board had previously authorised a lump sum (of US$1bil) to be paid only to the JV company and in return, the company would receive one billion shares.

Shahrol, however, could not tell who proposed the idea to split the fund but he agreed to the split based on the assumption that nothing was wrong with the transaction.

“Given the fact that Jho was in close contact with Najib, and at that time, my frame of mind was ‘this is something that needs to be done and everything is in order’.

“Ultimately, Casey convinced me that it was all right and we will inform the board of directors afterwards, ” he added.

The court heard earlier that the US$1bil split came about after Tang brought a document signed by PSI CEO Tarek Obaid to amend some of the clauses in the JV agreement.

Shahrol said some of the amendments included changing of the JV bank account from Banca Della Svizzera Italiana (BSI) Bank to JP Morgan and the US$700mil made payable to PSI.

Shahrol disagreed he had knowledge about the fund split.

He also disagreed that the decision to split the US$1bil payment for the JV company into US$700mil and US$300mil was reckless.

“It was just a matter of how the payment was made to the JV company. Casey convinced me and in good faith, I accepted that and it was not reckless, the decision was made based on what I knew and believed at that time, ” he said.

The witness, who is in his fourth week on the stand, was also questioned on his fiduciary duty to 1MDB.

Shafee: You don’t have a fiduciary duty to Najib vis-a-vis 1MDB.

Shahrol: That was not what happened.

Shafee: I don’t care what happened. Anyone can say “I feel oppressed” that they have to do it. I ask you, do you have a fiduciary duty to Najib vis-a-vis 1MDB?

Shahrol: I do.

Shafee then suggested that the witness was not aware of one’s fiduciary duty was owed to the company and not even the board, which was stated in the law.

After going back and forth on the meaning of fiduciary, Shahrol then admitted that he was not aware that it was owed to the company and not a person.

Shafee: Because you don’t understand the basic concept of company law, you have messed up your line of duty.

Shahrol: I was wrong in considering I should listen to Najib in all matters relating to 1MDB.

Shafee then asked Shahrol if Najib had ever asked him to only listen to the board of advisers (which Najib was the chairman) and not report to the board of directors.

“No, he never. If I may add he also never said ‘Shahrol listen to the board only, don’t listen to me’, ” Shahrol said.

The Pekan MP, 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 hearing before Justice Collin Lawrence Sequerah continues today.