Share
KUALA LUMPUR (Sept 26): Tan Sri Mohd Bakke Salleh and Tan Sri Azlan Zainol were the only 1Malaysia Development Bhd (1MDB) directors who scrutinised the irregularities surrounding the 1MDB-PetroSaudi joint venture (JV) in 2009, which eventually spiralled to burn a sum of US$1.53 billion in 1MDB’s pocket.
This was mentioned in the High Court by Datuk Shahrol Azral Ibrahim Halmi, who is the ninth prosecution witness in the 1MDB-Tanore trial to testify against former Prime Minister Datuk Seri Najib Razak.
In his testimony, Shahrol distanced himself from the irregularities which he signed off as then-1MDB CEO — with the excuse that he relied on “legitimate law firms” like Wong & Partners, and “experts” such as Jho Low and his affiliate Casey Tang (then 1MDB executive director) on the eligiblity of the JV.
Bakke’s involvement in 1MDB ended when he resigned as chairman on Oct 19, 2009 while Azlan quit on Jan 11, 2010.
Recall that in 2009, Najib and financier Low Taek Jho moved for 1MDB to enter into a 40:60 JV agreement with Saudi’s PetroSaudi International Ltd (PSI) supposedly as a government-to-government initiative.
The JV, named 1MDB-PetroSaudi Ltd, involved 1MDB undertaking an equity investment of US$1 billion while PetroSaudi would inject US$1.5 billion worth of assets.
“During the presentation of the JV by [then-1MDB executive director] Casey Tang on Sept 18, 2009, Tan Sri Bakke and Tan Sri Azlan did not seem confident with the investment proposal,” Shahrol testified.
“They had doubts whether it really involved a company belonging to the Saudi Arabian Government. In fact, Tan Sri Bakke wanted PSI representatives to come and present the JV to the [1MDB] board of directors themselves.”
The presentation did not happen. According to Shahrol, Najib spoke to Bakke on the phone during the subsequent board meeting on Sept 26, 2009 asking the board to expedite the proposal’s approval.
However, after the JV agreement was signed, PSI said its US$1.5 billion asset injection into the JVCo entailed a US$700 million advance for 1MDB, which meant 1MDB owed PSI.
Shahrol instructed 1MDB to divert US$700 million from the US$1 billion JV equity investment into an account belonging to Good Star Ltd, on grounds that PSI said Good Star was its affiliate.
The developments were revealed by Shahrol in the 1MDB board of directors meeting on Oct 3, 2009.
At the meeting, Bakke scolded the entire management including Shahrol and Tang.
Among others, this was because of the fund diversion, as well as the fact that the assets injected by PSI underwent paper valuation only, thus raising the uncertainty on the valuation and quality of the assets.
“He [Bakke] instructed us [Shahrol and Tang] to try and recoup the US$700 million,” Shahrol added.
At the subsequent board meeting a week later on Oct 10, 1MDB shortlisted four valuation firms to undertake revaluation on the injected assets.
“However, Tan Sri Bakke was still not satisfied with all my explanations [on the follow-up]. Soon after, he resigned as a director in 1MDB on Oct 19,” Sharol said.
The appointment of Wong & Partners — which has served Jho Low’s other companies previously — raises the question as to why a private law firm was appointed for a Government-linked company.
Shahrol had testified that an external firm would work faster towards facilitating the JV.
Under the workings of Jho Low and PSI, 1MDB got itself in a position where it had to fork out another US$830 million into the 1MDB-PSI JV — of which US$500 million went missing and US$330 million was again transferred to Good Star.
Najib is currently facing 25 counts of money laundering and abuse of power for alleged misappropriation of billions of ringgit in 1MDB funds.
