1MDB wanted to speed up US$1bil remittance into two accounts, court told

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) wanted to accelerate a US$1bil remittance into two accounts including an account which was later revealed to be linked to fugitive businessman Low Taek Jho or Jho Low, the High Court heard.

Deutsche Bank (M) Bhd's former managing director Jacqueline Ho, 51, testified that the bank received a remittance instruction on Sept 30, 2009, from 1MDB for the US$1bil to be split to two transactions - US$300mil into a J.P. Morgan SA account for 1MDB Petrosaudi Ltd (1MDB-Petrosaudi) and US$700mil into a RBS Coutts Bank Ltd account for PetroSaudi International (PSI) Ltd.

The witness, who was reading her witness statement in the RM2.28bil 1MDB trial involving former prime minister Datuk Seri Najib Razak, said the funds were for the acquisition of a 40% stake in 1MDB-Petrosaudi, a joint venture (JV) between 1MDB and PSI.

She said former 1MDB executive director Casey Tang requested Deutsche to execute the funds transfer as soon as possible.

"He also told me that it was important to do so as it was a government-to-government transaction.

"Later, Tang continued to persistently press upon Deutsche again, that Deutsche needed to speed up the money transfer process as Najib wanted to make a press statement on the 1MDB-PSI JV project. As such, we were urged to accelerate the US$1bil remittance process into those two accounts," she said here on Tuesday (June 21).

However, in another email, Ho said Deutsche was instructed to not include the name of the beneficiaries in the remittance instructions.

Ho said Tang informed Deutsche that the exclusion of the beneficiaries’ names came from a directive 1MDB received from its partner, PSI.

Tang also presented Deutsche with a letter from Bank Negara confirming about the transfers to two different accounts.

"In essence, we understood that Bank Negara had no objection to the transfer of US$300mil to 1MDB Petrosaudi’s account in J.P. Morgan and US$700mil to PSI's account in RBS Coutts and there was no issue from the perspective of Bank Negara’s foreign exchange control rules," she added.

Ho said she informed Tang and former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi that it was "highly likely" that the receiving banks would reject the transfers due to the lack of beneficiary names but Tang said 1MDB would bear the risk.

On the same day (Sept 30), Ho said the transactions were successful where US$300mil went through to JP Morgan SA with account number 7619400 and US$700mil to RBS Coutts account number 11116073.

However two days after the transfers, Deutsche received an enquiry from RBS Coutts for the bank to disclose the beneficiary name for account 11116073.

Ho said she contacted Shahrol and Tang to inform them of RBS Coutts' request and to seek approval to release the name, and Shahrol replied that it was Good Star Ltd.

"I then asked Shahrol why the name of the beneficiary is different from the name 1MDB had provided to Deutsche on Sept 30, and Shahrol told me that Good Star is a wholly-owned subsidiary of PSI and they wanted the funds transferred directly to their subsidiary," she added.

The court had heard previously that Good Star was a company which was initially represented as a PSI subsidiary but was later revealed to be controlled by Jho Low.

Najib is on trial for 25 charges in total - four for abuse of power that allegedly brought him financial benefit to the tune of RM2.28bil, and 21 for money laundering involving the same amount of money.

The hearing continues before Justice Collin Lawrence Sequerah on Wednesday (June 22).