1MDB trial: A second Aabar Investments PJS Ltd, another shell company, was set up in the Seychelles, court hears

KUALA LUMPUR: Another shell company also named Aabar Investments PJS Ltd has emerged in the 1Malaysia Development Bhd (1MDB) trial at the High Court here.

The defence, representing Datuk Seri Najib Razak who is accused of misappropriating RM2.28bil of 1MDB funds, revealed that there was a second Aabar Investments PJS Ltd, this one incorporated in the Seychelles.

The first Aabar Investments PJS Ltd (henceforth referred to as Aabar BVI) was set up in the British Virgin Islands.

The matter was raised when lawyer Wan Aizuddin Wan Mohamed questioned former 1MDB CEO Shahrol Azral Ibrahim Halmi on the remittance of US$223mil from 1MDB Energy Ltd to Aabar BVI.

When Shahrol was asked if the 1MDB board of directors was briefed about the US$223mil remittance to Aabar BVI, he replied that they were not.

The court had previously heard testimony that the British Virgin Islands-incorporated Aabar Investments PJS Ltd was not the same as Aabar Investment PJS (without the “Ltd” suffix, an actual subsidiary of the International PetroIeum Investment Company (Ipic), based in Abu Dhabi, UAE).

The court also previously heard that Aabar BVI was set up by Low and his associates in the British Virgin Islands, and was used to misrepresent itself as the actual Aabar Investment PJS.

Shahrol said that during the course of the investigation, he may have been shown documents stating that there were two companies named Aabar Investments PJS Ltd.

However, he declined to comment when asked if he knew the second shell company had nothing to do with the actual Ipic subsidiary.

The court was also told that 1MDB had taken a US$975mil loan from Deutsche Bank but it was never utilised to pay back the “Aabar options”.

(In 2014,1MDB had proposed to list 1MDB Energy Group in Bursa Malaysia through the buy-back option of “Aabar options”.)

Wan Aizuddin suggested that the proceeds of the loan was never paid to the actual Aabar Investments.

However, Mohd Hazem Abdul Rahman – the CEO who took over the post after Shahrol – had told the board of directors that the funds were used to pay back the “Aabar options”.

Wan Aizuddin: The proceeds of the loan was never paid to (the actual) Aabar?

Shahrol: As represented by Hazem, yes.

Wan Aizuddin: The money was in fact transferred in two tranches to Aabar Seychelles.

Shahrol: Yes.

The witness was also questioned on 1MDB’s decision to take up the loans and Shahrol said the refinancing direction was discussed by the shareholder and “we went along with that”.

“In 2014 and 2015, a lot of the decisions along the Aabar options and the Ipic guarantee were done at the Prime Minister’s Office level already, ” Shahrol added.

Wan Aizuddin: Would you agree with me that surely, the shareholder and the chairman of the board of advisers (referring to Najib) would have only agreed to what was proposed by the management?

Shahrol: I cannot comment as I have no knowledge of discussions between the management and the chairman of the board of advisers.

Wan Aizuddin: Would you agree with me that as a prudent businessman, rather than taking that loan, liquidating the asset was the better option?

Shahrol: Yes, it would make a lot more sense to liquidate and pay the Aabar options.

Najib, 67, is facing four charges of abusing his position to obtain gratification totalling RM2.28bil in 1MDB funds and 21 counts of money laundering involving the same money.

The hearing before Justice Collin Lawrence Sequerah continues on Thursday (Sept 3).