US$3 billion development for TRX diverted into Najib's account, says judge

KUALA LUMPUR: The flow of money from the US$3 billion bond issuance purportedly for the development of Tun Razak Exchange (TRX) had ultimately been diverted into the former Prime Minister Datuk Seri Najib Tun Razak's bank account.

Justice Datuk Collin Lawrence Sequerah (now Court of Appeal judge) who heard Najib's 1MDB case said that the matter was stated in the testimony by 47th prosecution witness (PW47), Bank Negara Malaysia (BNM) Analyst Adam Ariff Mohd Roslan.

The judge said on March 12, 2013, the accused attended the signing ceremony of the joint venture between 1MDB and Aabar Investment PJS amounting to US$6 billion that was held at the Prime Minister's Office.

"The prosecution evidence shows that on March 14, 2013, the accused signed a letter of support (LOS) to raise a loan through the issuance of bonds by 1MDB in the sum of US$3 billion. On March 19, the disbursement was made immediately by Bank of New York Mellon Group to the 1Malaysia Development Berhad Global Investment Limited's (1MDBGIL) account.

"The evidence on the speed of the fundraising transaction was given by PW26 (former Finance Ministry deputy secretary-general, Datuk Siti Zauyah Mohd Desa), PW42 (former non-executive director of SRC Datuk Suboh Md Yassin), PW9 (former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi) and PW10 (former 1MDB chief executive officer Mohd Hazem Abdul Rahman)," he said in his 41-page summary judgment.

Justice Sequerah further said that despite the defence allegations of the involvement of others with regard to the decision-making process, it was the accused who had taken action in various capacities, namely at the 1MDB stage as sole shareholder, the Minister of Finance (MOF) stage and at the Cabinet stage.

"The accused was therefore the ultimate decision maker. He had also not seen fit to lodge any police reports in respect of the alleged involvement of others.

"A consideration of all the evidence above showed that the accused had taken such actions in matters in which he had an interest, which were the basic facts necessary to raise the presumption under section 23(2) Malaysia Anti-Corruption Commission Act in respect of the third charge," he said.

The judge also held that upon a perusal and analysis of the evidence and based upon the demeanour of several witnesses, the court found that despite the accusations levelled, the credibility of these witnesses remains intact with regard to the main facts in issue in this case.

Among the witnesses are former 1MDB counsel Jasmine Loo Ai Swan, Najib's special officer Datuk Amhari Effendi Nazarudin and former Bank Negara governor Tan Sri Zeti Akhtar Aziz.

"This court also finds that there ultimately would be no motive for these witnesses to testify and to frame up the accused who was at the time wielding enormous powers as Prime Minister and Finance Minister.

"It is important to bear in mind that at the end of the day, these witnesses were not the ones on trial and notwithstanding the allegations against them, I find that their evidence in respect of the main facts in issue in the trial, are capable of belief," he said.

Meanwhile, Justice Sequerah pointed out that Najib approved the two loans to buy back the shares from Aabar.

"1MDB Energy (Langat) Limited (1MELL) entered into two term loan agreements with Deutsche Bank Hong Kong, the first of which was a US$250 million first loan which constituted the first action in this charge (fourth charge)," he said.

The judge said that according to PW9, the directors' circular resolution (DCR) was received together with the Special Rights Redeemable Preference Shareholder in Writing (SRRP) and Minutes of Representative attached which had been approved by the accused.

"PW10 also testified that it was the practice in 1MDB that when the Board of Directors (BOD) receives the DCR, the Shareholder's Resolution and Minutes By Representative signed by the accused were attached together and originally, undated.

"Although there was no SRPP and MR tendered by the prosecution in respect of this transaction, the evidence of the prosecution witnesses was sufficient to establish that the DCR for the US$250 million was accompanied by the SRPP and the MR duly approved by the accused," he said.

Justice Sequerah said evidence was led to show that the first loan taken by 1MDB amounting to US$250 million would not have materialized without the approval of the accused.

He said the purpose of the second loan of US$975 million was to refinance the US$250 million and also to pay the remaining outstanding payment to Aabar.

"PW10 confirmed that the BOD signed the DCR for the US$ 975 million loan. When this DCR was received by the directors, the Shareholders Resolution and Minutes by Representative were already signed by that accused," he said.

Earlier, Justice Sequerah ordered Najib, 71, to enter his defence on four charges of using his position to obtain gratification totalling RM2.3 billion in 1MDB funds and 21 money laundering charges involving the same money after finding that the prosecution had established a prima facie case on all 25 charges at the end of the prosecution's case.

-- BERNAMA

Note: An earlier version of the story mentioned that US$3 billion bond issuance were allocated for “The Exchange TRX.” The corrected term is "Tun Razak Exchange (TRX)".

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