Ex-CEO: Najib was like ‘emperor of 1MDB’, ultimate power in company

Danial Dzulkifly And Ida Lim
Datuk Seri Najib Razak arrives at the Kuala Lumpur Courts Complex October 17, 2019. — Picture by Shafwan Zaidon

KUALA LUMPUR, Oct 17 — Datuk Shahrol Azral Ibrahim Halmi agreed that former Prime Minister Datuk Seri Najib Razak was virtually the "emperor" of 1Malaysia Development Berhad (1MBD) as he was the ultimate decision-maker in the company.

Testifying against Najib in the latter’s 1MDB corruption trial, Shahrol referred to a provision in 1MDB's company constitution or memorandum and articles of association (M&A) which he had cited as effectively conferring Najib the "ultimate power" in the company.

Shahrol was referring to Article 117, which required 1MDB to obtain the prime minister's prior written approval for major decisions, including those touching on the company's senior management, financial affairs and investments.

Najib's lawyer Tan Sri Muhammad Shafee Abdullah was grilling Shahrol on the latter's interpretation of the Article 117 as meaning that Najib had the ultimate decision-making power within the sovereign wealth firm.

Shafee had suggested to Shahrol that despite Article 117, 1MDB board of directors would still be the ones holding the power to make decisions before seeking Najib's advice on such matters, including financial affairs.

Shahrol disagreed, reiterating that Najib was still the final decision maker in 1MDB.

This response irked Shafee, who then sarcastically suggested to Shahrol that Najib was the “Emperor of 1MDB’’ and had no check and balance mechanisms imposed on his power.

Shahrol then agreed, stating further that is what he had experienced during his tenure as 1MBD chief executive officer from 2009 to 2013, where Najib had signed off on documents on 1MDB's investments during that period.

Shafee: I'm putting it to you, your interpretation is still totally wrong, you have just made the prime minister the emperor of 1MDB, like the good old days of India. There was no checks and balances.

Shahrol: For phase 1, 2 and 3, I would have to say yes.

Citing 1MDB lawyers' explanation to him, Shahrol also later said Article 117 effectively gives the prime minister a "free rein" on how to use 1MDB as a strategic instrument of the country.

Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi is pictured at the Kuala Lumpur Court Complex October 17, 2019. — Picture by Shafwan Zaidon

A rose by any other name

Shafee had pressed Shahrol regarding a minutes of a two-person meeting in 2009 between Shahrol as 1MDB CEO and Najib as chairman of 1MDB board of advisers.

While Shafee argued that Najib could not have been functioning in such a role when the meeting was not attended by any others from the board of advisers, Shahrol disagreed and noted that 1MDB officials routinely refer to Najib in internal documents by that title of "chairman of the board of advisers".

Shahrol said he had taken Najib's signing off on the meeting minutes as the latter's instructions on "what he wishes for the company and he wants me to execute", but noted that he would have as 1MDB CEO compiled with any decisions made by Najib regardless of what role the latter was playing.

"I'm just explaining that at that time, because Datuk Seri Najib wears three hats, I didn't make a distinction about what role is he playing at that time.

"For me, if Datuk Seri Najib makes a decision, it's the same decision that will apply, whether he is prime minister, the finance minister or chairman of the board of advisers, he's the boss, I follow his actions," Shahrol said, also explaining such two-person meetings were to enable "black and white" documentation of Najib's instructions for 1MDB affairs.

Shahrol confirmed that Najib's instructions would have been accepted as valid by 1MDB, exclaiming while stressing Najib's position as the top leader of the country: "Yes, wearing any of the three hats, we will take the instructions seriously and work towards it. He was the prime minister. He is the prime minister!" 

Shahrol disagreed with the suggestion that the board of advisers' advice is not binding on 1MDB's board of directors, saying that he had felt 1MDB directors were "duty-bound" to execute Najib's wishes as the prime minister then.

While Shafee insisted that the power to make decisions lie with the 1MDB board and that the board is to make the decision first while the prime minister can overrule such decisions, Shahrol said: "But in practice, that doesn't always happen in 1MDB."

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