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KUALA LUMPUR: Former 1MDB CEO Mohd Hazem Abdul Rahman said at Najib Razak’s trial that he was shocked when the former prime minister signed documents approving another $ 975 million loan to buy back company shares from Aabar Investment PJS .
It said it had “not received any information” that 1MDB needed to borrow $ 975 million, known as a credit loan, from Deutsche Bank to pay off a previous $ 250 million bridge loan it had taken from the same bank.
“Datuk Seri Najib, who was the shareholder, had signed both resolutions required by law,” Hazem said.
He added that his then colleague and CFO Azmi Tahir was also in the dark as well.
“Azmi found out later and informed me that Terence (Geh Choh Heng) and Jasmine (Loo Ai Swan) were handling the matter with Deutsche Bank, under the instructions of Jho Low (Low Taek Jho),” Hazem said, referring to the director. 1MDB executive, Geh. and Attorney General Loo.
He told the court that in 2014, 1MDB had decided to exchange the 49% stock option granted to Aabar Investment PJS through two subsidiary companies.
Subsidiaries, 1MDB Energy Ltd and 1MDB Energy (Langat) Sdn Bhd, were established to allow 1MDB to acquire shares in two independent power producers (IPPs), Tanjong Energy Holdings Sdn Bhd and Mastika Lagenda Sdn Bhd.
The court previously heard that Goldman Sachs raised a total of $ 3.5 billion, through the bond issue, for both IPPs. Aabar assisted 1MDB Energy and 1MDB Energy (Langat) in securing the IPIC bonds.
Hazem said: “We needed to trade Aabar shares as it was an obstacle for us to be listed on Bursa Malaysia. The Securities Commission would reject our application if it discovered that other entities have shares in 1MDB Energy and 1MDB Langat.
The witness said that 1MDB had no choice but to take on Deutsche Bank’s first loan of $ 250 million as its investment in a fund management company, Brazen Sky Ltd, could not be repatriated.
The prosecution alleged that more than $ 175 million, of the $ 250 million bridge loan, was paid to Aabar BVI’s BSI bank account, purportedly to “exchange the option given as additional collateral” to purchase the two IPPs.
Meanwhile, more than $ 690 million from the $ 975 million facility loan was deposited into Aabar Seychelles’ account between September 3-30, 2014.
The prosecution said it would present evidence to show that part of the $ 1.23 billion, or RM49.9 million, had ended up in Najib’s bank account.
The hearing continues before Superior Court Judge Collin Lawrence Sequerah on September 17.
Najib faces 25 charges of abuse of power and money laundering for alleged 1MDB funds worth RM2.28 billion deposited into his AmBank accounts between February 2011 and December 2014.
