1MDB TRIAL | Former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi claimed that the Prime Minister's Office was involved in negotiating a guarantee by Abu Dhabi's International Petroleum Investment Company (IPIC) on 1MDB bonds arranged by Goldman Sachs in 2012.
Testifying in former prime minister Najib Abdul Razak's RM2.28 billion 1MDB graft trial, he said IPIC was to guarantee an RM1.75 billion bond which 1MDB raised in part to purchase power assets belonging to Genting Bhd's energy unit.
Questioned why the arrangement was not brought to a full board meeting, Shahrol (above) replied: "The whole process was driven outside of the company by the PMO and Goldman Sachs".
Under the deal, 1MDB had to pay US$790 million as a security deposit to Aabar Investments PJS, a subsidiary of IPIC, in exchange for the guarantee.
It is now known that the US$790 million was paid to a British Virgin Islands-based company bearing a similar name, Aabar Investments PJS (BVI), which is not a subsidiary of IPIC, and subsequently misappropriated.
There is also an ongoing dispute between 1MDB and IPIC in the UK courts but the Perikatan Nasional government is reportedly planning to drop the case in favour of diplomatic negotiations with the Abu Dhabi government.
"At that time, we were just taking instructions. We let it to Goldman and PMO to negotiate the terms as it involved the government sovereign wealth fund from Abu Dhabi," said Shahrol.
Defence counsel Wan Aizuddin Wan Mohammed then questioned Shahrol where he was getting instruction from, to which he said they were relayed by businessperson Low Taek Jho, also known as Jho Low, who is being sought for the case but is on the run.
"It's the same as before, where there is interaction or instruction from Low, it is not minuted," he said.
However, Shahrol agreed with the defence that Najib did not specifically give instruction to go ahead with the guarantee deal.
Najib was at the time the prime minister and finance minister, which by default also makes him the 1MDB shareholder. He was also the 1MDB advisory board chairperson.
[More to follow]