Former Malaysian leader Najib Razak is facing the biggest set of charges yet in his second 1MDB trial, which is set to shed light on the troubled state fund’s billion-dollar deals, reported Bloomberg.
Najib’s lawyers have argued he was misled by others, including fugitive financier Jho Low and he has pleaded not guilty to all 42 charges he faces for his alleged role in 1MDB, while Low has denied any wrongdoing.
Najib’s first trial may conclude as soon as November as the judge is set to decide whether to call on the defence then or move on to delivering a verdict
The current witness is Shahrol Azral Ibrahim Halmi, former CEO at 1MDB and Terengganu Investment Authority (TIA) the fund that later became 1MDB.
Additionally, Goldman Sachs Group’s lawyer is holding a watching brief at the trial, after Malaysia charged the bank’s current and former directors, including Vice Chairman Richard J. Gnodde and John Michael Evans, now president of Alibaba Group.
“Throughout the years, the method used by the perpetrators has been refined and tightened up,” leaving little room for discussion,” said Shahrol.
Shahrol said that the fund raised $3 billion in 2013 to fund its half of a $6 billion joint venture with Aabar Investment to develop TRX City, while Aabar did not put in its part of the fund.
Jho Low has been accused by the witness for trying to rush the process through, saying that the joint venture would have a big impact on Malaysia’s 2014 general election, creating the perception that the fund-raising was linked to the polls.
In July 2012, 1MDB planned to sell a more than $2.22 billion stake in a unit operating in Venezuela after the US sanctioned the South American country, added Shahrol. The stake was sold to Bridge Partners International Investment which paid 1MDB using $2.32 billion of promissory notes.
The Malaysian sovereign fund is said to have received none of the funds as the promissory notes were used to buy units in Bridge Global Absolute Return Fund as managed by Brazen Sky.
“Jho Low had no authority but he was given a mandate by Najib to arrange the plan from behind 1MDB, I am confident and believe that without the involvement and consent from Najib definitely none of this would have happened,” said Shahrol.
Shahrol said that 1MDB transferred funds to Aabar soon after two bond sales arranged by Goldman Sachs. 1MDB received $907.5 million on May 22, 2012, part of proceeds from its $1.75 billion debt offer meant to fund the purchase of Tanjong Energy Holdings, only to transfer $576.9 million to Aabar as ‘security deposit’ that same day.
Later that year, 1MDB received $1.64 billion on 19 October 2012 from proceeds of another $1.75 billion of notes sold to finance the acquisition of a power producer from Genting Power Holdings. The state fund transferred $692.2 million to Genting for the purchase and $790.4 million to Aabar again as a security deposit,” said Shahrol.
Shahrol said that the payments to Aabar were made in ‘good faith’ based on documentations presented to him by former Goldman Sachs banker Tim Leissner, 1MDB’s ex-general counsel Jasmine Loo and former 1MDB director Terence Geh.
The truth was discovered after an investigation into 1MDB that found out that the payments were arranged by Jho Low to bring the funds into an account managed by him.