Najib didn’t give greenlight over US$2.3 bln promissory notes – witness

KUALA LUMPUR: The High Court here yesterday was told that Datuk Seri Najib Tun Razak had never given his approval to the 1Malaysia Development Berhad’s (1MDB) management to convert the company’s Petro Saudi International (PSI) investment into promissory notes purportedly worth US$2.3 billion.

Former non-executive director of 1MDB, Tan Sri Ismee Ismail, 58, said this during cross-examination by Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah in the former premier’s trial over the misappropriation of RM2.3 billion in funds from 1MDB.

Muhammad Shafee: You know the reason why I asked you this is because it goes to the heart of our defence. Did you see somewhere the fingerprints of my client (Najib)? With the way what was being done, the management purposely mishandled these funds. Did you see the fingerprints of my client? Ismee: No. Muhammad Shafee: Is it ridiculous for the management to accept the promissory notes without collateral?

Ismee: Yes.

The 13th prosecution witness also agreed that the said promissory notes were never shown to the 1MDB board of directors.

When asked on Ismee’s understanding of promissory notes, Ismee said: “It is something like ‘I promise to pay’.”

He also testified that the fund’s management seemed to be acting on the instructions of fugitive businessman Low Taek Jho or Jho Low.

Previously, the court was told that 1MDB paid US$1 billion in 2009 for a 40 per cent stake in the joint venture while PSI held the remaining 60 per cent. The funds were later converted into Islamic Murabahah notes.

1MDB later paid another US$830 million between 2010 and 2011 for the same purpose. By 2012, the notes were said to be worth US$2.22 billion.

Muhammad Shafee then queried the witness on 1MDB’s 2013 financial report that was supposed to be concluded by audit firm KPMG but they were unable to do so even after a year of meeting with the state fund.

To this, Ismee said it was due to KPMG’s dissatisfaction with the documents and answers given by the 1MDB management to the audit company pertaining to 1MDB’s investments in Brazen Sky Ltd, a company incorporated in the British Virgin Islands by Jho Low.

Ismee said at the material time, he had requested a meeting to be convened by the 1MDB management, solely to update the board of directors, especially on the documents and details requested by KPMG on the issue of Brazen Sky investment, as KPMG had raised suspicion on the ‘underlying assets’ of the investment.

Muhammad Shafee: Did you, by any means, think that KPMG was being difficult?

Ismee: They were a bit demanding.

Muhammad Shafee: They had a good reason to demand. Now, on hindsight, you know what happened to the (investment) money?

Ismee: Yes.

Ismee also agreed to a suggestion by the lawyer that throughout the process, Najib was not obstructing the 1MDB audit by KPMG.

Najib, 68, is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The trial before judge Datuk Collin Lawrence Sequerah continues today.