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KUALA LUMPUR: Former 1Malaysia Development Bhd (1MDB) Chief Executive Officer Mohd Hazem Abd Rahman told the High Court on Thursday (September 17) that he wanted to resign amid concerns the company is riddled with debt.
Hazem, who replaced predecessor Datuk Shahrol Azral Ibrahim Halmi in 2013, said he began to worry that 1MDB was knee-deep in debt and doubted its ability to pay it back in early 2014.
“Among the debts that had to be paid in 2014 was a Maybank loan of RM2.5bil taken by 1MDB to buy shares of Tanjong Power in 2012.
“There were a lot of 1MDB expenses that involved project financing funds like infrastructure development for TRX (Tun Razak Exchange) and Jimah (Jimah Energy Ventures), which were financed through new debt,” he said.
The 10th prosecution witness was reading his 110-page statement in the 1MDB trial involving former Prime Minister Datuk Seri Najib Razak here on Thursday.
At the same time, Hazem said it did not know if 1MDB still had its funds abroad or if it had been used for Umno.
“Funding abroad, in my estimate, was around US $ 3.8 billion (RM13 billion). This money was enough to pay Maybank’s debt and serve as capital for any 1MDB project in Malaysia, ”he added.
The 48-year-old witness said he was getting more and more concerned and had many questions about handling funds abroad because he did not have access to this despite being the CEO.
“Only (fugitive businessman) Low Taek Jho and (attorney general) Jasmine Loo know about this (overseas funding),” he added.
Hazem said that as CEO, he should have had full authority to control the ins and outs of funds from abroad to the country because the funds should be controlled by the company’s management.
“However, I received instructions from Low not to alter the funds abroad,” he added.
Hazem said he often met with Najib’s late chief private secretary, Datuk Azlin Alias, to share his (Hazem’s) concerns.
“I told Azlin of my intention to resign and be replaced by someone who could lead 1MDB in its debt-laden state.
“I emailed (1MDB CFO) Azmi Tahir about my concerns regarding Low’s irrational plans for 1MDB as early as September 2013. I also told Azmi my intention to resign,” he said.
Hazem said Azlin often advised him to wait and only resign after the listing of 1MDB Energy in Bursa Malaysia.
However, in late October 2014, Hazem came back from performing the hajj and spoke seriously about giving up Low and Azlin.
“I told Azlin to tell Low to look for a candidate who could replace me because all the officers below me did not want to replace me as the CEO position was exposed to many political elements,” he added.
On January 3, 2015, Hazem returned from vacation and was informed by Azlin that they had found a candidate for the position of deputy CEO.
Hazem said he was asked to serve as CEO until Edra Energy (a subsidiary of 1MDB) was listed in Bursa Malaysia in mid-2015.
“On January 5, 2015, Arul Kanda Kandasamy came to report as president of 1MDB, which meant that, as CEO, I should report to him. At the time, I thought it was the right time to resign, since the position of president is similar to a CEO, ”he added.
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 October 5.
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