Ex-CEO says Jho Low’s ‘nefarious’ 1MDB plans involved Najib, the ‘most powerful person’ in Malaysia

·8-min read
Former 1MDB CEO Mohd Hazem Abd Rahman is pictured at the Kuala Lumpur High Court January 6, 2021.  — Picture by Yusof Mat Isa
Former 1MDB CEO Mohd Hazem Abd Rahman is pictured at the Kuala Lumpur High Court January 6, 2021. — Picture by Yusof Mat Isa

KUALA LUMPUR, May 17 — Datuk Seri Najib Razak as the prime minister then was involved in Low Taek Jho’s “nefarious agenda” for 1Malaysia Development Berhad (1MDB) when the government-owned firm’s subsidiary raised US$3 billion of funds in 2013, a former 1MDB CEO claimed in court today.

Mohd Hazem Abd Rahman, a former CEO of 1MDB from March 2013 to early January 2015, said this while being cross-examined as the 10th prosecution witness in Najib’s ongoing trial over power abuse and money laundering charges involving more than RM2 billion of 1MDB funds.

Focusing on 1MDB Global Investments Limited’s (1MDB GIL) fundraising in March 2013 by taking on debts through a bond issuance of US$3 billion, Najib’s lawyer Wan Aizuddin Wan Mohammed quizzed the former 1MDB CEO over whether he had taken any action over his suspicions about the fundraising exercise.

Wan Aizuddin: You said you had suspicions that the fundraising exercise — something is wrong, there is some nefarious agenda by Jho Low.

Mohd Hazem: Yes, I had suspicions.

Wan Aizuddin: And you said Jho Low told you all these bond issuance is at the instructions of the prime minister.

Mohd Hazem: Yes.

Wan Aizuddin: Wouldn’t that mean the prime minister would also be involved — as per what Jho Low told you — in this nefarious agenda?

Mohd Hazem: Wouldn’t the prime minister be involved? Absolutely yes, in hindsight, yes.

Wan Aizuddin: So that is a very, very heavy accusation to say the prime minister was involved in something illegal with the company.

Mohd Hazem: Yes, to a certain extent, yes.

Wan Aizuddin: Having harboured suspicion that the then prime minister is involved in this nefarious agenda of Jho Low, you still didn’t think it is right and responsible for you as head honcho of 1MDB to go straight to him and clarify?

Mohd Hazem: No.

Wan Aizuddin then suggested that the reason why Mohd Hazem did not feel the need to clarify with and confront Najib with the suspicions that he had was because he was allegedly “playing along” with Low’s plan, but Mohd Hazem disagreed.

While having some suspicions about the fundraising exercise, Mohd Hazem confirmed he did not officially raise his suspicions to the 1MDB board, but only shared his concerns verbally with the then 1MDB board of directors’ chairman Tan Sri Lodin Wok Kamaruddin.

“At that particular time, you were basically dealing with a company that is being managed and runned by the most powerful person in Malaysia — the prime minister. And I would not even dare to report it.

“Like I told you before, it’s either you work with it or quit. You can see the example even beforehand, on the resignation of two directors,” Mohd Hazem said. These two directors included former 1MDB chairman Tan Sri Mohd Bakke Salleh.

Asked by Wan Aizuddin, Mohd Hazem later confirmed he did not lodge any report to the police or any authorities or the Companies Commission of Malaysia.

Wan Aizuddin then asked “And even if not the minister of finance himself, you didn’t address your concern to the MOF Inc of the Ministry of Finance?”

Mohd Hazem then replied “You mean the same person?”

Asked again by Wan Aizuddin, Mohd Hazem confirmed he did not take the initiative of telling 1MDB’s sole shareholder MOF Inc of the Finance Ministry that there was something wrong with 1MDB and that he was being instructed by Low on company matters.

Mohd Hazem disagreed with Wan Aizuddin’s suggestion that the reason for his alleged “inaction” was that he was abetting Low in committing fraudulent activities in 1MDB.

Najib previously held these positions simultaneously — prime minister, finance minister, and also chairman of 1MDB’s board of advisers.

1MDB GIL’s US$3 billion bond was originally intended to be injected into a British Virgin Islands-based joint venture company Abu Dhabi Malaysia Investment Company (Admic) formed in March 2013 between 1MDB and Aabar Investments PJS Limited (now said to be a fake company with similar name to an actual Abu Dhabi company).

The joint venture was later aborted and 1MDB GIL had to bear losses to make interest payments for the bond, with Mohd Hazem testifying last year that funds raised from the US$3 billion bond were used for matters such as paying off the company’s debts and to buy land in Penang which featured in Najib’s election campaign speech.

Former prime minister Datuk Seri Najib Razak leaves the High Court in Kuala Lumpur May 17,2021. — Picture by Miera Zulyana
Former prime minister Datuk Seri Najib Razak leaves the High Court in Kuala Lumpur May 17,2021. — Picture by Miera Zulyana

Earlier when asked by Wan Aizuddin, Mohd Hazem agreed that Low did not hold any formal positions in 1MDB or in the government, while also confirming that he knew Najib has several official positions in relation to 1MDB via the company’s corporate structure and its Memorandum & Articles of Association (M&A) or company constitution.

Mohd Hazem confirmed that the M&A states that Najib as the prime minister is 1MDB’s board of adviser’s chairman and that written approval of the prime minister is required for certain investments, and that Najib as finance minister was in charge of 1MDB’s sole shareholder MOF Inc and that the approval from the Finance Ministry-owned MOF Inc is required for asset disposals as it is also 1MDB’s special shareholder.

Wan Aizuddin then suggested that Najib as the 1MDB advisory board chairman, finance minister and prime minister is the person that Mohd Hazem should have addressed, if the then 1MDB CEO had any “doubt” or “discomfort” when undertaking 1MDB business or suspicions towards Low’s conduct and instructions.

Mohd Hazem however said he would usually direct his concerns as 1MDB CEO to the 1MDB chairman which he said had access to the prime minister, or even to Najib’s then principal private secretary Datuk Azlin Alias.

He disagreed that Najib would be the proper person for him to verify any instructions from Low, saying: “I have no access to the prime minister. I do not report to the prime minister. I report to the board.”

Agreeing that he had still followed Low’s instructions despite the latter lacking any position in 1MDB, Mohd Hazem spoke of a “culture” where the 1MDB leadership knew about the practice of following Low’s instructions on the company’s matters.

After his very first 1MDB board meeting as CEO, Mohd Hazem recalled a vivid memory of then 1MDB chairman Lodin saying “You know Jho Low”, which he described as a “signal” from Lodin to talk to Low on 1MDB matters.

“Everybody is well aware of the presence of Jho Low and the instructions, agenda, planning of Jho Low, none of them ever raised the matter — ‘you should report this or that’, this was basically a culture,” he said, when referring to the 1MDB senior management, 1MDB board members, the Prime Minister’s Department as well as some of Najib’s special officers.

Asked by Wan Aizuddin if others knew that Low has been “puppeteering” Mohd Hazem as CEO in the conduct of business of 1MDB, Mohd Hazem said those in the 1MDB board and 1MDB senior management and also those in the Prime Minister’s Office knew about this.

When asked why the 1MDB board meeting minutes had never mentioned Low or put on record Low’s instructions to the 1MDB CEO if this was true, Mohd Hazem said Low would obviously not be mentioned in the minutes as he holds no position in 1MDB.

Asked about not going straight to then finance minister Najib over his suspicions that Low may have a “hidden agenda” on 1MDB and that something illegal is happening, Mohd Hazem said it was sufficient for him to highlight his concerns to the people he mentioned.

He also said he had wanted to resign earlier on as 1MDB CEO, but continued to remain in position until early 2015 as he was told to stay on until a replacement is found.

Tomorrow, Najib will be headed to the Court of Appeal in Putrajaya, for what is scheduled to be the final day of hearing of his appeal against his conviction and sentencing in a separate criminal case involving RM42 million of former 1MDB subsidiary SRC International Sdn Bhd.

Najib’s 1MDB trial is set to resume in the High Court in Kuala Lumpur this Wednesday and this Thursday.

Before the end of the 1MDB trial proceedings today, Shafee’s lead defence lawyer Tan Sri Muhammad Shafee Abdullah informed the High Court judge that Najib is required to appear in the Sessions Court on Wednesday as a prosecution witness in former Sabah infrastructure development minister Datuk Peter Anthony’s document forgery trial.

Deputy public prosecutor Ahmad Akram Gharib also noted that Peter’s trial is about to conclude and that Najib is one of the few prosecution witnesses left before the prosecution can close its case in Peter’s trial in the Sessions Court.

High Court judge Collin Lawrence Sequerah initially said the High Court has to take priority as the 1MDB trial “has given way to too many trials” in terms of hearing dates.

The High Court judge however finally decided that he would first hear a contempt of court proceedings against former Umno member and former Umno supreme council member Datuk Lokman Noor Adam over alleged intimidation of a 1MDB trial witness on Wednesday while Najib testifies in Peter’s trial, before proceeding with hearing the 1MDB trial after the matter involving Lokman.

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