1MDB paid Bloomberg to list fund and boost its public image, court told

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) paid international news agency Bloomberg to list one of its funds in order to improve poor public perception of the investment portfolio, the High Court here heard.

Former 1MDB CEO Mohd Hazem Abd Rahman agreed to suggestions by former prime minister Datuk Seri Najib Razak’s lawyer Tania Scivetti that listing the Bridge Global Absolute Return Fund (BGARF) on Bloomberg would improve issues of legitimacy of the portfolio.

Mohd Hazem, the 10th prosecution witness, was being cross-examined by Scivetti at the 1MDB trial involving Najib here on Thursday (Aug 19).

It was reported in 2016 that 1MDB had selected Bridge Partners Investment Management (Cayman) Ltd to manage US$2.3bil (RM7.67bil) of its cash.

The money was invested in BGARF, a Cayman Islands-registered segregated portfolio company.

Scivetti referred the witness to minutes from a board meeting where the 1MDB chairman had commented on the poor perception of the fund.

Mohd Hazem agreed that he reassured the chairman during the meeting and said perception would improve once BGARF was listed on Bloomberg.

Scivetti: Bloomberg is a big name and has a platform to put financial data of a company, that's why it is important to be listed on Bloomberg.

Mohd Hazem: Yes.

Scivetti: If you listed on Bloomberg, it would give legitimacy to funds and would resolve issues of legitimacy.

Mohd Hazem: Yes.

The lawyer, however, suggested that it was not difficult to list on the international media platform where one only needed to pay a small subscription fee, which she described as “not pricey at all”, and no due diligence would be done on Bloomberg’s part.

Scivetti: Bloomberg doesn't verify what the company is saying about themselves to get listed. You pay them, they put it on.

Mohd Hazem: I don't know. I cannot answer on behalf of Bloomberg.

Scivetti then suggested that being listed on Bloomberg did not guarantee there was any value in the said company, to which Mohd Hazem replied: “Yes, to a certain extent.”

Scivetti: So essentially, what you were telling the board, BGARF pays subscription to Bloomberg, fund managers can write a few lines, five lines or so, and they have full disclosure to represent whatever they want about the fund and automatically they will get credibility.

Mohd Hazem: No, I disagree.

The trial got off to a late start despite being scheduled to begin at 9.30am as Najib was absent in the morning.

Lawyer Rahmat Hazlan informed Justice Collin Lawrence Sequerah that his client was among the 114 MPs summoned to Istana Negara to confirm their support for Datuk Seri Ismail Sabri Yaakob as the next prime minister.

The judge said Najib should have had the courtesy to attend the proceedings first.

The court ordered for the proceedings to be adjourned until the afternoon.

Najib, 68, 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 continues on Monday (Aug 23).