Najib signed letter of support for gov't to settle 1MDB's US$3 bln debt - Witness

KUALA LUMPUR: The High Court was told today that the Malaysian government had taken the responsibility to pay the debts of 1Malaysia Development Berhad (1MDB) amounting to US$3 billion if the company failed to do so.

Former non-executive director of 1MDB Tan Sri Ismee Ismail, 57, said this when referring to the government's letter of support to 1MDB dated March 14, 2013 signed by former Prime Minister Datuk Seri Najib Tun Razak who was also Finance Minister then.

He said the letter stated that the Malaysian government had taken note that 1MDB's subsidiary, 1MDB Global Investment Ltd (1MDB GIL) would be raising US$3 billion via a bond issuance to be paid in full in 2023.

"This document (letter) explains that if 1MDB GIL is unable to pay or there is a shortfall in paying this debt, 1MDB will provide financial assistance to pay the debt.

"Besides that, if 1MDB fails to pay the debt, then the Malaysian government will take the responsibility to finance 1MDB to pay the debt or directly pay the debt until it is settled.

"In other words, this letter is like a strong support from the Malaysian government to pay US$3 billion in bonds with interest created by 1MDB through 1MDB GIL," he said, adding that the letter of support was issued expeditiously by the government.

The 13th prosecution witness said this at the former prime minister's corruption and money laundering trial, involving RM2.3 million belonging to 1MDB.

Reading out a 111-page witness statement, Ismee said the approval for the US$3 billion fundraising was reached in a directors' circular resolution (DCR) dated March 12, 2013 while a letter of support was issued on March 14, 2013.

The witness said that almost all the decisions reached by 1MDB to make the US$3 billion fundraising a success was through DCR and Special Right Redeemable Preference Shareholders Resolution (SRR).

"Supposedly, a decision can be made either through the Board of Directors (BOD) meeting or through DCR and SRR. However, if an immediate decision is required, then it will usually be made through DCR and SRR.

Najib, 68, is facing four charges, namely using his position to obtain bribes amounting to RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The trial before Judge Datuk Collin Lawrence Sequerah continues on Dec 13.

-- BERNAMA