1MDB: Defence witness grilled for denying being Najib's proxy

Summary

• The prosecution cross-examines ex-1MDB chairperson Che Lodin Wok Kamaruddin over why he denied being ex-prime minister Najib Abdul Razak’s proxy in the sovereign wealth fund.

• The prosecutor submits before the Putrajaya High Court that the early part of Lodin’s written witness statement did not refer to the nature of the witness’s relationship with the accused.

• Lodin testifies he denied being a proxy as he regarded his appointment as director and later chairperson in 1MDB as a professional.

1MDB TRIAL | Former 1MDB chairperson Che Lodin Wok Kamaruddin was questioned about his claim that he was not a proxy of former prime minister Najib Abdul Razak at the Putrajaya High Court.

Deputy public prosecutor Kamal Baharin Omar cross-examined the defence witness today over his testimony that did not even mention the manner of his relationship with the accused.

During the RM2.27 billion 1MDB abuse of power and money laundering trial against Najib, the prosecutor was referring to Lodin’s (above) written testimony where the witness claimed, “No, absolutely not”, to a question if Najib ever asked him to be a proxy in 1MDB via being a director there in 2009.

Kamal: You did not explain how you even knew Najib, then suddenly said here about (not being a) proxy.

Lodin: I always take this kind of appointment (as director) as a professional, to say I am close with Najib, maybe, maybe not. I have known Najib for around 45 years, but most of my interaction and relationship with Najib was more on an informal basis. He was a defence minister.

Kamal: You did not even tell about any relationship (in the early part of the 211-page witness statement) and then (suddenly mentioned) proxy.

Lodin: In my opinion, a proxy means ‘Please take care of my interest, put the shares in your name or it is meant for me’, that is what I meant by proxy.

In the course of the 1MDB trial since 2019, the prosecution contended that fugitive businessperson Low Taek Jho (Jho Low) was a proxy of Najib when being involved in alleged financial wrongdoing at the Malaysian sovereign wealth fund.

The late deputy public prosecutor Gopal Sri Ram likened Low, who is on the lam, as a “mirror image” of Najib, which the accused rubbished as untrue as he claimed all wrongdoing was solely masterminded by the fugitive and 1MDB’s management team.

Lodin today testified that he first got to know Najib when the latter became Pahang menteri besar in the early 1980s.

Lodin recalled that he worked under Najib when the witness was chief executive of Lembaga Tabung Angkatan Tentera (LTAT) and director of Boustead Holdings Berhad in the 1990s.

Najib was defence minister from 1990 to 1995, and from 1999 to 2008. LTAT is the major shareholder of Boustead, a conglomerate involved in multiple businesses including plantation, financial services, trading, pharmaceutical, property development, and shipbuilding.

It should be noted that Lodin stepped down from LTAT and Boustead in 2018, following the 14th general election that saw the emergence of the Pakatan Harapan administration led by Dr Mahathir Mohamad.

Kamal: There were official dealings between you and Najib?

Lodin: As LTAT chief executive and Boustead group managing director, yes.

Lodin recalled that around 2009, Terengganu Investment Authority (TIA) then-CEO Shahrol Azral Ibrahim Halmi offered him a position as director of the then-state-owned fund. In the course of tenure from 2009 to 2016, Lodin was promoted to chairperson.

In the latter part of 2009, TIA became fully owned by the federal government via the Minister of Finance Incorporated (MOF Inc).

During Kamal’s cross-examination today, Lodin said he accepted the offer conveyed by Shahrol as he found it exciting to be part of a sovereign wealth fund involved in major economic activities, and that it was an honour for him to accept the offer when Najib was then premier and finance minister.

Kamal: Did you check with Najib whether this (offer from Shahrol) was correct, such as by making a telephone call to Najib over the offer at that time?

Lodin: I respect a senior, especially the prime minister, I do not think I had his telephone number, I (was) not easily (able to) access him, I needed to make an appointment, he was a busy person. Subsequently after with Shahrol, there was was follow-up with (a) letter from Najib (over Lodin’s appointment as 1MDB director).

Kamal: You said it was an honour to receive the invitation, you mentioned you respected the prime minister, can I say that it sounded like it was an order from the prime minister for you to be a director?

Lodin: I feel I can decline (the offer), but I sat down to think that this is a government plan of a project for this company (1MDB) and for the good of the country and the people, it was not a directive, it was up to me. There was no compulsion on my part to accept. I accepted (the offer) as I can contribute based on my experience.

Leaving it to management

During further grilling by Kamal, Lodin contended that the 1MDB board was informed by the fund's management that the US$700 million of its funds went to a subsidiary of Good Star Limited in 2009.

The defence witness said that the board left it to management to do the documentation on the funds, which formed part of a US$1 billion of 1MDB funds meant for a joint venture with Petrosaudi International Limited (PSI) that year.

Prosecutors contended that the US$700 million was embezzled as Good Star is an offshore entity allegedly linked to Low.

Lodin: We (the board) expect wrongdoing to be spotted by an audit committee, and then audit by external auditors, so this would surface later on. We depended on this check and balance mechanism to confirm actions by the company’s management.

Kamal: If the board had asked for this, would it not have been better?

Lodin: There are occasions when you have to have confidence in the management. Once lost confidence in management, might as well close the company (1MDB).

The defence witness contended that 1MDB's management was hugely capable and highly qualified people and that it was their responsibility to present the documentation to the board without a director needing to ask.

The trial resumes on Monday next week.

Prima facie case

On Oct 30 last year, the criminal court ordered Najib to enter his defence over four abuses of power and 21 money laundering charges involving RM2.27 billion from 1MDB.

Trial judge Collin Lawrence Sequerah ruled that the prosecution succeeded in establishing a prima facie (answerable) case against Najib due to the strength of some 50 witness testimonies.

Between early December last year and late January this year, Najib spent 26 days on the witness stand trying to raise reasonable doubt in the prosecution’s case.

The accused contended that he had neither knowledge nor involvement in wrongdoing at 1MDB.

The former Pekan MP also relied on the defence that he was given a donation promise by the late Saudi King monarch King Abdullah during a meeting between them in Riyadh in 2010.

The accused has been serving a six-year jail sentence since August 2022 over a separate graft case involving RM42 million from SRC International, a former subsidiary of 1MDB.

The sovereign wealth fund’s stated purpose was to ensure long-term sustainable development while safeguarding the economic well-being of Malaysians.

MOF Inc also fully owned SRC.

Lead defence counsel Shafee Abdullah acted for Najib.

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