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KUALA LUMPUR: On Tuesday (September 1) the High Court was told that 1Malaysia Development Bhd (1MDB) had taken out more loans despite owning RM32 billion in debt, as fugitive businessman Low Taek Jho and the Prime Minister’s Office (PMO).
Former 1MDB CEO Shahrol Azral Ibrahim Halmi, who was being questioned by attorney Wan Aizuddin Wan Mohamed, said the company had to raise US $ 3 billion (RM12.43 billion) to complete the joint venture (JV). between 1MDB and Aabar Investments PJS.
Shahrol is the ninth witness in the 1MDB trial involving former Prime Minister Datuk Seri Najib Razak, who is charged with misappropriation of RM2.28bil.
Wan Aizuddin was questioning the witness about Aabar’s buyback option.
(In 2014, 1MDB had proposed to list 1MDB Energy Group in Bursa Malaysia through the “Aabar Options” buyback option).
Wan Aizuddin: Why didn’t 1MDB use the $ 3 billion to buy back?
Shahrol: That was not the recommendation of management.
Wan Aizuddin repeatedly questioned the witness as to why the $ 3 billion was never used, but 1MDB had taken another loan in its place.
Shahrol responded that the $ 3 billion was earmarked for the joint venture.
Wan Aizuddin: Since this money went to the so-called JV, the JV did not materialize at that time.
Shahrol: I asked about the progress of the JV and until it was confirmed that the JV was not happening, in my opinion we raised the funds for the JV and we cannot use it for other purposes.
Wan Aizuddin: Do you know the debt of 1MDB?
Shahrol: between RM37bil and RM39bil.
Wan Aizuddin: The debt that accumulated was already at RM32bil.
Shahrol: Correct.
Wan Aizuddin: Would it be wise for 1MDB to take another buyback loan?
Shahrol: The simple answer is that we have no choice because we have instructions to execute this very clearly from the PMO.
The witness said the instructions were relayed to him via talking points by Low, as well as by email from Najib’s late chief private secretary, Datuk Azlin Alias.
The defense then pressured Shahrol on the fact that 1MDB was already in debt, but borrowed nonetheless.
“It was consistent with Low’s instructions for me. And it’s not another loan, it’s refinancing, ”Shahrol responded.
Wan Aizuddin: So you take another loan to finance a loan?
Shahrol: It’s called refinancing.
Wan Aizuddin: Is it (refinancing) at a lower rate?
Shahrol: Ideally at a lower rate.
Previously, the witness was questioned about the alleged joint venture between 1MDB and Aabar, which the defense claimed was a scam.
Shahrol denied signing and sent a letter to the prime minister with the intention of misleading him into believing that the JV was going to happen.
He also denied participating in the embezzlement of funds involving $ 3 trillion in premeditated bonds by Low and various other figures at 1MBD.
Wan Aizuddin: You did not act in the best interest of the company by allowing 1MDB to participate in this scam.
Shahrol: I don’t agree.
Wan Aizuddin: Billions of dollars have been embezzled from the $ 3 billion raised, which actually went to the so-called joint venture.
Shahrol: Correct.
Wan Aizuddin: And you played an active role in this embezzlement.
Shahrol: I don’t agree.
Najib, 67, faces four counts of abusing his position to obtain gratification totaling RM2.28 billion in 1MDB funds and 21 counts of money laundering involving the same money.
The hearing before Judge Collin Lawrence Sequerah continues on Wednesday (September 2).
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