JV signed with wrong firm
1MDB invested US$1bil with wrong ‘PetroSaudi’, court told
KUALA LUMPUR: The names of two companies carried the word “PetroSaudi”. But they were two different entities and 1Malaysia Development Bhd (1MDB) inked the deal with the wrong one, the High Court heard.
It was told that the sovereign wealth fund had been in talks with oil services and production company PetroSaudi International (PSI).
But instead, it signed an agreement with PetroSaudi Holdings (Cayman) Ltd in 2009. 1MDB invested US$1bil (RM4.195bil) into the joint venture (JV).
Former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi, 49, said he signed the document despite noticing the different company name after consulting with 1MDB executive director Casey Tang.
Lead counsel Tan Sri Muhammad Shafee Abdullah pointed out that PetroSaudi Holdings Cayman was different from PetroSaudi International, where the latter did not mention the word “Cayman”.
“At that time, Tang explained that PetroSaudi Holdings (Cayman) was a wholly-owned subsidiary of PetroSaudi International,” Shahrol said during cross-examination in the 1MDB trial here yesterday.
Shafee: How did you account for that?
Shahrol: There is a legal team looking into this. Tang didn’t indicate that this was something that shouldn’t be done.
Shafee: I’m relying on you. Forget about Tang. You were the CEO. You take the shot first. How did you explain to the board about this?
Shahrol: The same way I explained to the court now. Tang was in charge in ensuring everything was in order. He indicated that there was nothing wrong with this.
The lawyer then questioned Shahrol on why he did not seek an opinion from Wong & Partners, the law firm that represented 1MDB in the transaction.
Shahrol replied that he did not do so as Tang was already working on the transaction.
Shafee: You are putting your US$1bil signature on this agreement. I would be terrified if I was in your position. Didn’t you ask for further clarification?
Shahrol: I didn’t.
Shafee: In hindsight, you agree this was a silly decision on your part?
Shahrol: In hindsight, could I have done it differently? I could not have done it differently. I relied on Tang.
The witness however agreed that he could have gotten Wong & Partners to write to him to confirm the company.
Shafee: If you had done that you wouldn’t be under suspicion.
Earlier, the witness also agreed to Shafee’s suggestion that former prime minister Datuk Seri Najib Razak could have possibly been manipulated by Low Taek Jho, whom he described as a “conductor of an orchestra”.
Fugitive financier Low, better known as Jho Low, has been central in the scandal. He is still at large and has been charged in absentia with criminal charges linked to 1MDB.
“He (Low) is like the conductor of an orchestra where the different players play their part without necessarily knowing what the other players are doing to produce a certain outcome,” Shahrol said.
Shafee: My suggestion is, if a team of professionals could be manipulated by Low, could the prime minister have been manipulated?
Shahrol: Honestly it’s difficult for me to comment from the limited sphere of what I know. To use your words, the manipulation was done with a very good disguise of ‘this is for the good of the country, for the good of the prime minister’, but I don’t know what the prime minister then knew, so it is very difficult for me to comment.
Shafee: Even if you don’t know the answer to my question conclusively, but to orchestrating without participants knowing, there is a distinct possibility that the prime minister himself didn’t know (he was manipulated)?
Shahrol: Based on what I’ve seen, there is definitely the possibility.
Najib, 66, faces 25 charges in total – four for abuse of power that allegedly brought him financial benefit to the tune of RM2.3bil; and 21 for money laundering involving the same amount of money.
He faces imprisonment of up to 20 years and a fine of up to five times the sum or value of the gratification if found guilty.
The hearing before Justice Collin Lawrence Sequerah continues today.