Najib's lawyer accuses former 1MDB CEO of CBT and money laundering

KUALA LUMPUR: Former 1Malaysia Development Bhd (1MDB) CEO Mohd Hazem Abd Rahman should have been sent to jail for criminal breach of trust and money laundering over the company's funds, the High Court heard.

Lead defence counsel Tan Sri Muhammad Shafee Abdullah, who represented former prime minister Datuk Seri Najib Razak, made the scathing suggestion after another intense grilling of Mohd Hazem, the tenth prosecution witness on the stand, at Najib's RM2.28bil 1MDB trial here on Monday.

The lawyer suggested Mohd Hazem had conspired with other 1MDB senior officers Azmi Tahir, Terrence Geh, former chief executive officer Datuk Shahrol Azral Ibrahim Halmi as well as fugitive financier Low Taek Jho to obtain a USD$975mil loan from Deutsche Bank for the purpose of a buyback of its options from one of its investment partners.

However, parts of the said loan were never used for the intended purpose but it was transferred from 1MDB Energy Holdings Ltd in two tranches - USD$223mil and USD$457mil - to a shell entity, Aabar Investments PJS Ltd (Seychelles), in September, 2014.

The funds from two tranches, in turn, were transferred to various entities passing through Bridge Global Absolute Return Fund, Lambasa Global Opportunity Fund, Universal Ventures Fund, Brazen Sky Ltd and 1MDB Global Investment Ltd.

The transactions, Muhammad Shafee contended, was without the authorisation of 1MDB's board of directors.

Muhammad Shafee suggested that the loan from Deutsche Bank was for a "specific purpose" and when the purpose was not fulfilled, Mohd Hazem and the others have committed criminal breach of trust of the company's funds to which Mohd Hazem agreed was technically true.

Muhammad Shafee then asked if the witness had gotten permission from Bank Negara Malaysia to transfer the funds but Mohd Azem was uncertain if he had.

"This monies originated from a Malaysian company, so you have to get permission from Bank Negara. If you don't get permission, that's another offence," said Muhammad Shafee.

Mohd Shafee then went on to say that the act also constituted money laundering, not just CBT, to which Mohd Hazem agreed.

To another question, Mohd Hazem said nobody had investigated him over these alleged offences.

"The Malaysian Anti-Corruption Commission (MACC) has been very kind to you," Muhammad Shafee said.

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 resumes before Justice Collin Lawrence Sequerah on Sept 13.

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