The High Court today was told that 1Malaysia Development Berhad (1MDB) took out another loan to complete the joint venture (JV) with Aabar Investment PJS despite having an existing USD$3 billion in issued bonds for the JV and deep in RM32 billion debt back in 2014.

Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi, who has been on the witness stand since late last year, said the sovereign wealth fund, however, had no choice but to take out the loan as they were obliged to follow Prime Minister’s Office (PMO) instruction to get the JV done before the visit of Crown Prince of Abu Dhabi.

The 49-year-old witness said this during cross-examination by lawyer Wan Aizuddin Wan Mohammed at Datuk Seri Najib Tun Razak’s RM2.3 billion 1MDB graft trial.

Wan Aizuddin: At the time 1MDB had accumulated a debt of RM32 billion ringgit, would it be prudent to take out another loan to eliminate the buyback action?

Shahrol Azral: The simple answer is we have no choice as we were under clear instructions from the PMO to get the JV done.

For the record, the buyback option was to redeem “Aabar Options” during the acquisition of independent power plants back in 2012, as what agreed upon between 1MDB and Aabar. The redeem was made through 1MDB subsidiary company, 1MDB Energy Holdings Limited.

Wan Aizuddin: How do you know the instruction came from PMO?

Shahrol Azral: There were talking points passed to me by fugitive businessman, Low Taek Jho or Jho Low and there was also an email from Najib’s principal private secretary, the late Datuk Azlin Alias, detailing the final form of the JV.

Wan Aizuddin: The company is already in billions of dollars in debt, but you took out another loan?

Shahrol Azral: It was consistent with the instruction by PMO and Jho Low to me to make it a done deal (JV deal) and it was not another loan, it was refinancing.

Wan Aizuddin: So you took out another loan to finance a loan? Was it at a lower rate?

Shahrol Azral: It was called refinancing and yes ideally at a lower rate.

The ninth prosecution witness added that there was no approval from the 1MDB board on the utilisation of the USD$3 billion bond which 1MDB raised to finance the development of Kuala Lumpur International Financial District (now known as TRX) project.

Wan Aizuddin: You can also confirm that there was no approval by 1MBD board of directors in relation to utilisation of USD3 billion bond?

Shahrol Azral: There was no specific approval. However, there was one time that 1MDB chief financial officer Azmi Tahir updated the board, saying that the funds will be placed with a fund manager.

Shahrol Azral added that the deal with Aabar was pushed through despite the debt because of Jho Low’s involvement.

Wan Aizuddin: You knowingly and actively participated in defrauding 1MDB by misleading the board, the (then) PM and the government of Malaysia.

Shahrol Azral: I disagree.

Shahrol Azral also disagreed to the suggestion by the lawyer that the embezzlement of funds out of the US$3 billion bond was done in his full knowledge, in cahoots with Jho Low, his associates as well as 1MDB financial adviser, Goldman Sachs.

Najib, 67, faces four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The trial before Justice Collin Lawrence Sequerah continues tomorrow.

-- BERNAMA