‘1MDB ENGAGED IN MONEYLENDING’
Ex-1MDB CEO says PSI owed sovereign wealth fund US$2.2b in 2015
THERE was more confirmation of how 1Malaysia Development Bhd (1MDB) was an unmitigated disaster after it entered into a joint venture (JV) with PetroSaudi International Ltd (PSI).
This was affirmed by former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, 49, under cross-examination in the 1MDB trial involving former prime minister Datuk Seri Najib Razak.
Shahrol said PSI owed 1MDB US$2.2 billion when he last checked before leaving the sovereign wealth fund in 2015.
It was revealed that apart from pumping money into the venture, 1MDB had given a US$500 million loan to PSI at an interest rate of 8.67 per cent. However, the fund only saw US$41 million returned in the first year and never received a single sen after that.
Lead defence lawyer Tan Sri Muhammad Shafee Abdullah, who seemed amused upon hearing that 1MDB had actually loaned money to PSI, asked Shahrol whether he knew that one needed a moneylender’s licence before giving others money and charging interest on it. Shafee: Was 1MDB empowered to do money lending?
Shahrol: Yes.
Shafee: Really? Did 1MDB have a moneylender’s licence from Bank Negara (Malaysia)?
Shahrol: No.
Shafee then chided Shahrol, saying that even chettiars (private moneylenders) needed a licence.
The witness did not say anything on hearing the lawyer’s remark.
It was recorded that 1MDB had entered into the JV with PSI by pumping in US$1 billion in 2009.
This gave it a 40 per cent stake, while the balance of 60 per cent was held by PSI, which did not contribute any money but put in its supposed assets as capital.
However, it has since been discovered that a Turkmenistan oil field, purportedly valued at US$3.51 billion, did not belong to PSI, while an Argentinian oil field was worth only US$108 million.
Shahrol denied he was part of a plot to steal 1MDB money. He rebutted the accusation after Shafee questioned him about 1MDB’s planned venture with French energy firm, GDF Suez.
Shafee raised the issue after referring to minutes, which had been prepared before the meeting took place in 2010.
However, Shahrol said this could have happened as a result of earlier discussions between 1MDB representatives, namely fugitive businessman Low Taek Jho @ Jho Low and former 1MDB investment officer Nik Faisal Ariff Kamil.
Shafee: Nik Faisal already prepared the minutes before the meeting took place. He must have a special talent to know what was going to happen before it happened.
Shahrol: I can’t say how it happened. Maybe it was based on earlier discussions. Shafee: You are just guessing? Shahrol: Yes, the same way you guessed that Nik Faisal has a special talent.
Shafee: I put it to you that you are part of a conspiracy with Jho Low and Nik Faisal.
Shahrol: I disagree.
Shafee: You are like the Malay proverb — cuba menegakkan benang yang basah (trying to defend the indefensible)
Shahrol: I disagree.
The trial before justice Collin Lawrence Sequerah continues.
Najib, 66, is facing 25 charges of money laundering and abuse of power over alleged 1MDB funds.
He is accused of abusing his position to obtain RM2.28 billion in bribes between February 2011 and December 2014. He is said to have transferred RM2.28 billion to his bank accounts and to have used the money.