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KUALA LUMPUR: Another shell company also called Aabar Investments PJS Ltd has emerged in the 1Malaysia Development Bhd (1MDB) trial in High Court here.
The defense, representing Datuk Seri Najib Razak, accused of misappropriation of RM2.28bil from 1MDB funds, revealed that there was a second Aabar Investments PJS Ltd, this one incorporated in the Seychelles.
The first Aabar Investments PJS Ltd (hereinafter Aabar BVI) was established in the British Virgin Islands.
The matter arose when attorney Wan Aizuddin Wan Mohamed questioned former 1MDB CEO Shahrol Azral Ibrahim Halmi about the shipment of $ 223 million from 1MDB Energy Ltd to Aabar BVI.
When Shahrol was asked if the 1MDB board of directors was informed about the $ 223 million remittance to Aabar BVI, he answered no.
The court had heard testimony that Aabar Investments PJS Ltd, incorporated in the British Virgin Islands, was not the same as Aabar Investment PJS (without the suffix “Ltd”, an actual subsidiary of International PetroIeum Investment Company (Ipic), based in Abu Dhabi, UAE).
The court also previously heard that Aabar BVI was established by Low and his associates in the British Virgin Islands, and was used to misrepresent himself as the current PJS of Aabar Investment.
Shahrol said that during the course of the investigation, he may have been shown documents indicating that there were two companies called Aabar Investments PJS Ltd.
However, he declined to comment when asked if he knew that the second shell had nothing to do with the actual Ipic subsidiary.
The court was also informed that 1MDB had taken a $ 975 million loan from Deutsche Bank, but that it was never used to pay for “Aabar options.”
(In 2014, 1MDB had proposed to list 1MDB Energy Group in Bursa Malaysia through the “Aabar options” buyback option).
Wan Aizuddin suggested that the proceeds of the loan were never paid back to Aabar’s actual investments.
However, Mohd Hazem Abdul Rahman, the CEO who took over after Shahrol, had told the board that the funds were used to return “Aabar’s options.”
Wan Aizuddin: Was the loan proceeds never paid to (current) Aabar?
Shahrol: Represented by Hazem, yes.
Wan Aizuddin: In fact, the money was transferred in two tranches to Aabar Seychelles.
Shahrol: Yes.
The witness was also questioned about 1MDB’s decision to accept the loans and Shahrol said that the direction of refinancing was discussed by the shareholder and “we followed him.”
“In 2014 and 2015, many of the decisions along the Aabar options and the Ipic guarantee have already been made at the level of the Prime Minister’s Office,” added Shahrol.
Wan Aizuddin: Would you agree with me that surely the shareholder and the chairman of the advisory council (referring to Najib) would only have agreed with what was proposed by the management?
Shahrol: I cannot comment because I am not aware of the discussions between management and the chairman of the advisory council.
Wan Aizuddin: Would you agree with me that as a prudent entrepreneur, instead of taking that loan, liquidating the asset was the best option?
Shahrol: Yes, it would make a lot more sense to liquidate and pay off Aabar’s options.
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 Thursday (September 3).
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