Najib didn't reply via SMS over diversion of US$700m of 1MDB funds: Witness
1MDB AUDIT TRIAL | Then prime minister Najib Abdul Razak did not reply when informed through SMS about the diversion of US$700 million in funds meant for a joint venture between 1MDB and Petrosaudi International (PSI), the Kuala Lumpur High Court heard today.
Former 1MDB board member Mohd Bakke Salleh testified this during today’s 1MDB audit report trial against Najib and the sovereign wealth fund’s former CEO Arul Kanda Kandasamy.
The 13th prosecution witness was referring to the 2009 diverting of US$700 million out of a total US$1 billion of 1MDB funds, whereby the diverted amount went to Good Star Ltd, a company controlled by wanted fugitive Low Taek Jho or Jho Low.
The prosecution contended that Good Star has nothing do with 1MDB...
1MDB AUDIT TRIAL | Then prime minister Najib Abdul Razak did not reply when informed through SMS about the diversion of US$700 million in funds meant for a joint venture between 1MDB and Petrosaudi International (PSI), the Kuala Lumpur High Court heard today.
Former 1MDB board chairperson Mohd Bakke Salleh testified this during today’s 1MDB audit report trial against Najib and the sovereign wealth fund’s former CEO Arul Kanda Kandasamy.
The 13th prosecution witness was referring to the 2009 diverting of US$700 million out of a total US$1 billion of 1MDB funds, whereby the diverted amount went to Good Star Ltd, a company controlled by wanted fugitive Low Taek Jho or Jho Low.
The prosecution contended that Good Star has nothing to do with 1MDB and was falsely represented as a subsidiary of the Malaysian sovereign wealth fund.
During examination-in-chief by Gopal Sri Ram today, Bakke testified that he informed Najib via Blackberry handphone about the diversion, following a 1MDB board meeting on Sept 26, 2009.
The witness claimed that the issue of US$700 million diversion was raised during the meeting, but that the board members then were unaware that the money actually went to Good Star. He gave oral evidence that Jho Low was present during the meeting.
He testified that during the meeting, Shahrol informed the board that external lawyers explained that the US$700 million monetary flow was done for “commercial reasons”.
Bakke said that they reacted in an adverse and angry manner as this was not the instruction given to 1MDB’s management, which was under then CEO Shahrol Azral Ibrahim Halmi.
In reply to a question from Sri Ram, Bakke said that following the meeting, he informed Najib about it via Blackberry handphone.
Sri Ram: Did Najib know about the diversion of funds?
Bakke: We at the time (were) not in a position to draw conclusions. But after the meeting, yes he was informed about it. I informed him.
Sri Ram: What was his reaction?
Bakke: I sent an SMS (short messaging service) on my Blackberry, but I received no reply. That was not a normal reaction I received before (from Najib when communicating via SMS). Before that, he responds to all messages.
Najib is charged with using his position to order amendments to 1MDB's final audit report before it was presented to the PAC in order to prevent any action against him.
Co-accused Arul Kanda was charged with abetting Najib in making the amendments.
Conflicting financial statements
The charges are framed under Section 23 (1) of the MACC Act 2009, which specify a jail term of up to 20 years and a fine of no less than five times the amount of gratification or RM10,000, whichever is higher.
The prosecution is contending that a decision to make the amendments was taken during a meeting on Feb 24, 2016, at the office of the then chief secretary to the government Ali Hamsa.
It was alleged this was done to remove or alter certain portions of the 1MDB audit report, including dropping the issue of wanted fugitive Low Taek Jho’s (Jho Low) attendance at the fund’s board meetings.
Another issue that was allegedly dropped from the 1MDB audit report was the two conflicting 2014 financial statements of the sovereign wealth fund.
Besides Ali and Arul Kanda, others who were present at the meeting were Ambrin, former NAD officer Saadatul Nafisah Ahmad Bashir, Najib’s former chief private secretary Shukry Salleh, and the then Attorney-General’s Chambers representative Dzulkifli Ahmad.
'We were shocked, angered'
During proceedings before trial judge Mohamed Zaini Mazlan this afternoon, Bakke testified that following the revelation of diversion of the US$700 million, he tendered his resignation as 1MDB board chairperson on Oct 19, 2009.
The witness told the court that it was because 1MDB’s management did not abide by the board’s instructions on the US$1 billion from the Malaysian sovereign wealth fund, which was meant for the joint venture between it and PSI.
“We (1MDB board) were shocked, angered and flabbergasted to describe our response. Then we told management to get back the US$700 million via the proper remittance process.
“Then management came up with this response that external lawyers advised this was the most proper way to do this for commercial reasons, but we (1MDB board) were not convinced.
“We made clear to management that the money has to be credited to the 1MDB Petrosaudi joint venture bank account, but that never happened,” Bakke said.
The witness claimed that on that date (Oct 3, 2009), he asked the other 1MDB board members - Che Lodin, Azlan and Ismee Ismail - that they all (including Bakke) should resign and that the other board members “nodded their heads”.
Bakke testified he did not immediately resign on Oct 19 that year because he wanted to check that the minutes of the 1MDB board meetings were properly recorded.
The witness testified that he later, in 2015, shared copies of the 1MDB meeting minutes with the National Audit Department (NAD), the MACC and Bank Negara Malaysia.
The trial before Zaini will resume on March 7 next year.
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