Ex-1MDB chief: I was concerned about firm’s debts

KUALA LUMPUR: A former 1Malaysia Development Bhd (1MDB) CEO told the High Court that he wanted to resign from the position amid concerns that the company was riddled with debts.

Mohd Hazem Abd Rahman – who replaced predecessor Datuk Shahrol Azral Ibrahim Halmi in 2013 – said he began worrying that 1MDB was knee-deep in debts and doubted its capacity to repay them in early 2014.

“Among the debts that had to be paid in 2014 was a RM2.5bil Maybank loan taken by 1MDB to buy Tanjong Power shares in 2012.

“There were many 1MDB expenses which involved project financing funds such as the development of infrastructure for TRX (Tun Razak Exchange) and JIMAH (JIMAH Energy Ventures), which were financed through new debts,” he said.

The 10th prosecution witness was reading his 110-page witness statement at the 1MDB trial involving former prime minister Datuk Seri Najib Razak yesterday.

Hazem, 48, also said he did not know whether 1MDB still had its funds abroad or if it had been used for Umno.

“The funds abroad, based on my estimation, were about US$3.8bil (RM13bil), enough to pay off the Maybank debt and serve as capital for any 1MDB project in Malaysia,” he added.

He said he became increasingly worried about the management of the funds abroad because he did not have access to them despite being the CEO.

“Only (fugitive businessman) Low Taek Jho and (general counsel) Jasmine Loo knew about this (the funds abroad),” he said.

Hazem said as the CEO, he ought to have had full authority to control the ins and outs of the funds from abroad into the country.

However, he received instructions from Low not to disturb those funds, he added.

Hazem said he often met with Najib’s late principal private secretary Datuk Azlin Alias to relay his concerns.

“I told Azlin about my intention to resign and be replaced by somebody who could head 1MDB in its debt-laden state.

“I emailed (1MDB chief financial officer) Azmi Tahir about my worries regarding the unreasonable plans made by Low for 1MDB as early as September 2013.

“I also told Azmi about my intention to resign,” he added.

Hazem said Azlin often advised him to wait and resign after the listing of 1MDB Energy on Bursa Malaysia.

However, at the end of October 2014, Hazem said he came back from performing the hajj and spoke seriously about resigning to Low and Azlin.

“I told Azlin to tell Low to find a candidate that could replace me because all the officers below me did not want to fill in the post as the CEO position was exposed to a lot of political elements,” he added.

On Jan 3, 2015, Hazem returned from a holiday and was informed by Azlin that they had found a candidate for the post of assistant CEO.

Hazem said he was asked to hold the CEO post until the listing of Edra Energy (1MDB’s subsidiary) on Bursa Malaysia in mid-2015.

“On Jan 5, 2015, Arul Kanda Kandasamy came to report as 1MDB president, which meant that as the CEO, I should report to him.

“I thought that was the appropriate time to resign as the post of president is similar to a CEO,” he said.

The hearing before Justice Collin Lawrence Sequerah continues on Oct 5.

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