1MDB: Obvious that govt was financially weak - former MOF officer

A retired officer from the Finance Ministry testified that the Malaysian government was weak due to the country’s poor international debt rating during Najib Abdul Razak’s time as prime minister in 2013.

Siti Zauyah Md Desa (above) said this during today’s RM2.28 billion 1MDB corruption trial against Najib, who is also a former finance minister.

The 26th prosecution witness was replying to questions during cross-examination by defence counsel Wan Aizuddin Wan Mohammed.

The lawyer was grilling her over her past testimony regarding the letter of support (LOS) allegedly signed by Najib for 1MDB to obtain a loan of US$3 billion linked to the Malaysian sovereign wealth fund’s joint venture with Aabar Investments PJS.

Previously, Siti Zauyah, who used to be in the Finance Ministry’s loan management division, testified that despite the absence of due diligence by the Ministry of Finance Incorporated (MOF Inc), the LOS was still processed only based on the alleged directive of Najib.

Najib’s defence team had also previously during cross-examination highlighted her lack of awareness of the details of her own written witness statement.

During proceedings before the Kuala Lumpur High Court around midday this afternoon, Aizuddin was asking Siti Zauyah about her role in preparing the cabinet paper regarding the LOS in 2013.

It was then that the witness made the remark about Malaysia’s score as given by international debt rating agencies.

Siti Zauyah: It looked so obvious (that) our government was weak.

Aizuddin: At that point in time, or our government is weak now?

Siti Zauyah: When we were (trying to) raise the funding (for 1MDB), our ratings.

Aizuddin: Could you elaborate in what sense?

Siti Zauyah: I do not remember our rating. If it was at least AA-, then we are bankable, and the country has the ability to repay liabilities.

On July 13, 2013, during Malaysia’s government under Najib, international rating agency Fitch Ratings reportedly revised the country’s outlook from stable to negative.

During proceedings before trial judge Collin Lawrence Sequerah, Aizuddin then put forward the defence’s contention that the LOS exhibit before the court is a forged document as the signature was allegedly not the accused’s.

However, Siti Zauyah said she could not answer this as she has never seen the actual LOS document.

1MDB’s US$3b debt

Meanwhile, the witness denied the defence’s contention that her testimony that Malaysia still owed US$3 billion (RM13.48 billion) in related debts was hearsay.

Siti Zauyah said though she has no personal knowledge of whether 1MDB has managed to repay the debt, she heard it from an officer in charge - she did not disclose who it was.

When Aizuddin asked her about her past testimony that the Malaysian government has yet to settle the debt, the witness admitted her statement was made based on alleged documents she purportedly saw.

The lawyer was referring to Siti Zauyah’s testimony on June 15 that Malaysia still owes US$3 billion in debt.

Proceedings before Sequerah continues this afternoon.

Najib’s charges

Najib is on trial for four counts of abuse of power and 21 counts of money laundering involving RM2.28 billion from 1MDB.

The Pekan MP was alleged to have committed four counts of corruption at AmIslamic Bank Berhad’s Jalan Raja Chulan branch in Bukit Ceylon, Kuala Lumpur, between Feb 24, 2011, and Dec 19, 2014.

On the 21 money laundering charges, Najib is purported to have committed the offences at the same bank between March 22, 2013, and Aug 30, 2013.

The prosecution contended that the wrongdoing at 1MDB was carried out by businessperson Low Taek Jho, also known as Jho Low, and several others with the blessing of Najib.

The accused’s defence team, however, claimed that the ex-prime minister had no knowledge of the crime perpetrated at 1MDB and that the embezzlement was solely masterminded by Low and other members of the fund’s management.

Did the courts bend over backwards for Najib?

Bar Council: An attack on our president is an attack on us all

Najib withdraws discovery bid in US$1.18b SRC lawsuit

1MDB trial: Witness misleading with her silence, claims Najib’s lawyer

Bar chief to face Zaid in court over conduct during Najib's trial

1MDB audit case: MACC investigator unaware of ex-auditor’s testimony