Ex-1MDB CEO Hazem says had RM97k salary with 10-month bonus once, did not take 1MDB funds

Ida Lim
·4-min read
Former 1MDB CEO Mohd Hazem Abd Rahman arrives at the Kuala Lumpur Court Complex September 17, 2020. — Picture by Ahmad Zamzahuri
Former 1MDB CEO Mohd Hazem Abd Rahman arrives at the Kuala Lumpur Court Complex September 17, 2020. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, Sept 17 — Mohd Hazem Abd Rahman today told the court that his final monthly salary when he was 1Malaysia Development Berhad (1MDB) chief executive officer (CEO) was RM97,000, and that he had once received a bonus amounting to 10 months’ worth of his salary.

Mohd Hazem said he had first joined 1MDB as chief operating officer (COO) in August 2012 with an initial salary of RM65,000, and was later made 1MDB CEO in March 2013 to replace the outgoing CEO Datuk Shahrol Azral Ibrahim Halmi.

Asked by deputy public prosecutor Mohamad Mustaffa P. Kunyalam, Mohd Hazem today said his first drawn salary as CEO was RM93,000 per month, while his last drawn salary was about RM97,000 a month.

Mohd Hazem confirmed he had received bonuses while working in 1MDB, telling Mustaffa: "As CEO, I received twice. Once in 2013, I think it was about five months' bonus, but not entirely for CEO, but as COO... Second one was in 2014, if not wrong, about 10 months."

Mohd Hazem did not say what his exact salary was at the point when he received those bonuses. 

But when asked by Mustaffa if he ever received a single cent from funds raised or loans borrowed by 1MDB while he was CEO, Mohd Hazem said "no".

Mohd Hazem also denied being part of any plan by Low Taek Jho — better known as Jho Low and whom he had described as Najib's proxy for 1MDB affairs — to cheat the government-owned company of its money.

Mustaffa: Did you conspire with Jho Low or any of his associates to defraud 1MDB?

Mohd Hazem: No, I did not.

Mohd Hazem was testifying as the 10th prosecution witness in Najib's power abuse and money laundering trial over more than RM2 billion of 1MDB funds.

Mohd Hazem joined 1MDB in 2012. Prior to that, he had worked since 1996 in a bank named Arab Malaysian Merchant Bank Berhad, Danamodal Nasional Berhad and was an investment analyst in Credit Lyonnais Securities Asia Kuala Lumpur and Deutsche Bank Kuala Lumpur. He also had a stint in the government-linked company Sime Darby Group.

Mohd Hazem said his last drawn salary in Sime Darby was RM38,000 when he left as its motor division’s head of strategic initiative. He was also Sime Darby Auto Connexion managing director before joining 1MDB in August 2012.

Najib's trial before High Court judge Collin Lawrence Sequerah resumes on October 5.

Last year, Shahrol Azral — who was Mohd Hazem’s predecessor for the 1MDB CEO post — testified in the same Najib trial that his last drawn salary in 1MDB was RM99,000 per month, and that he had once received an 18-month bonus for his work performance but that such a bonus was received when his salary was lower.

Both Shahrol Azral and Mohd Hazem had told the court that 1MDB had took on increasingly more debts and borrowed more and more money as the years went by to raise funds for purported investments or to repay old debts, but evidence has been shown in court that billions of ringgit of such funds were diverted away from 1MDB into companies controlled by Low and his associates.

The prosecution had on the first day of trial said that it would prove that some of the funds that were borrowed by 1MDB had flowed out to the entities under Low and his associates, and had allegedly eventually made its way into Najib’s bank accounts.

Both Shahrol Azral and Mohd Hazem have said they were not part of Low’s plans to misappropriate 1MDB money, and that they had followed the instructions given by Low on financial decisions as it appeared to have Najib’s blessings as the then prime minister and as Najib’s actions were consistent with such instructions.

Mohd Hazem said he had even tried to resist complying with Low’s instructions especially for investment decisions that did not seem feasible, but noted that Najib’s late principal private secretary Datuk Azlin Alias had told him to comply as Low’s instructions were allegedly Najib’s instructions.

Mohd Hazem told the court that he had wanted to resign as 1MDB CEO as early as September 2013 and said he had also voiced his intention to quit during his tenure but was asked by Azlin to stay on until 1MDB’s energy unit was listed.

Mohd Hazem finally quit the 1MDB CEO post in early January 2015 as Arul Kanda Kandasamy had at that time joined the company as 1MDB president, which he felt could be considered an equivalent portfolio and enable his stepping down.

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