Najib greenlit Shahrol's replacement, court told

1MDB TRIAL | Former prime minister Najib Abdul Razak had personally agreed to Mohd Hazem Abdul Rahman joining 1MDB as an executive director, the Kuala Lumpur High Court heard today.

This was allegedly another demonstration of Najib's authority over 1MDB, which under Article 117 of the company's memorandum and articles of association, states that the prime minister must decide on major appointments or investments.

Prosecution witness and former 1MDB CEO Shahrol Azral Ibrahim Halmi (photo, above) told the court he received Hazem's CV through Jho Low sometime in 2012.

Hazem's CV, said Shahrol, included a note by Najib stating that the new recruit ought to be made "executive director".

"What happened next was I clarified that there was no executive director in 1MDB at the time and I recommend (Hazem be) appointed as COO.

"When he came in as COO, I made him responsible for real estate while I focussed on the energy business," he said.

Under cross-examination by Wan Aizuddin Wan Mohammed, Shahrol could not confirm if the board approved of Hazem's appointment but there was a letter to this effect from Najib.

Hazem eventually succeeded Shahrol as CEO in 2013 while the latter then moved on to the defunct Performance Management And Delivery Unit (Pemandu) while still being a director in 1MDB.

Little is known about Hazem other than his stint as an analyst with Deutsche Bank followed by several years as managing director of Sime Darby Auto ConneXion.

In 2015, Hazem resigned as 1MDB CEO and was replaced by Arul Kanda Kandasamy.

Although Shahrol had testified that Najib personally was involved in Hazem's entry into 1MDB, Wan Aizuddin suggested that the new CEO was appointed on Jho Low's suggestion to continue a scheme to embezzle funds from 1MDB.

Wan Aizuddin: Hazem was appointed to succeed you as CEO as a way of passing the baton from one person (to another) to be told by Jho Low on what to do.

Shahrol: No comment on that.

Wan Aizuddin's line of questioning established that Hazem never briefed the board on transactions, financing agreements or lending agreements involving Abu Dhabi Malaysian Investment Company Limited (Admic).

Admic was the name of the joint-venture company set up in 2013 between 1MDB and phoney company Aabar Investment PJS Ltd (BVI).

Both partners were supposed to inject US$3 billion into the deal, but only 1MDB delivered.

Shahrol agreed with Wan Aizuddin's suggestion that 1MDB Global Investment Limited's RM3 billion bond issuance, arranged by Goldman Sachs, was the result of negligent actions by 1MDB because the board was not briefed.

The witness also testified that 1MDB's board did not discuss a contingency plan if Aabar did not fulfil their end of the bargain.

Wan Aizuddin: Didn't you think that was important?

Shahrol: In hindsight, yes but then all eyes were focussed on the crown prince's visit. In my mind then, it was the crown prince himself (Sheikh Mohammed Zayed Al Nahyan) who was the boss of Aabar.

The crown prince of Abu Dhabi had inked the joint-venture agreement with Najib on March 12, 2013, on behalf of Aabar Investment PJS (based in Abu Dhabi) and 1MDB.

However, had been discovered that the deal was actually signed between 1MDB and the BVI-based version of Aabar, posing as the actual "Aabar" from Abu Dhabi.

Shahrol assumed his new role at Pemandu on March 14, 2013, just two days after the "deal" was inked.

Najib is on trial over four charges of abusing his position to obtain gratification and 21 counts of money laundering in relation to RM2.28 billion in 1MDB funds. 

Witness: Jho Low said he could get PM to bulldoze US$6b guarantee letter

Najib not warned when inking deal with 'fake' Aabar, court told

Najib's defence: 1MDB must be run by a bunch of idiots

Ex-1MDB CEO claims PMO involved in negotiating IPIC guarantee deal