Husni: Najib's instructions to Shahrol caused 1MDB to lose US$700 mil

Datuk Seri Ahmad Husni Hanadzlah (Photo by Zahid Izzani Mohd Said/The Edge)

Datuk Seri Ahmad Husni Hanadzlah (Photo by Zahid Izzani Mohd Said/The Edge)

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KUALA LUMPUR (June 23): Former finance minister II Datuk Seri Ahmad Husni Hanadzlah has said that former 1Malaysia Development Bhd (1MDB) chief executive officer Datuk Shahrol Azral Ibrahim Halmi was taking instructions from former prime minster Datuk Seri Najib Razak regarding 1MDB, which caused the company to lose US$700 million through a sham investment.

Husni — the 20th prosecution witness of the 1MDB-Tanore trial in which Najib is accused of misappropriating more than RM2 billion of 1MDB funds — was under re-examination from lead prosecutor Datuk Seri Gopal Sri Ram, who asked him about Shahrol and Najib.

On Wednesday, Najib's lawyer Tan Sri Muhammad Shafee Abdullah painted a picture to Husni of Shahrol being a criminal and cited former 1MDB chairman Tan Sri Mohd Bakke Salleh's testimony in court, who also called Shahrol a criminal.

Husni defended Shahrol, saying that Shahrol was only terminated in 2016 from 1MDB after all the mismanagement had taken place, and added that Najib even appointed Shahrol to the Prime Minister's Office after that.

On Thursday, before Justice Datuk Collin Lawrence Sequerah, Sri Ram asked Husni if he was aware who Shahrol was taking instructions from at 1MDB, to which Husni replied Najib.

Sri Ram: It was put to you that Bakke had described Shahrol as a criminal. Are you aware from whom Shahrol was taking instructions from?

Husni: Najib Tun Razak.

Sri Ram: By Najib, you mean the accused?

Husni: Yes.

Sri Ram then asked him if he was aware if Shahrol had received any other perks besides his salary from 1MDB.

Husni stated that he did not know of any other perks Shahrol received besides his salary.

Decision-making power in 1MDB

Sri Ram then moved on to question Husni about the decision-making power in 1MDB, asking the latter who had the power to make decisions.

Sri Ram: As far as 1MDB is concerned, did you have any decision-making power?

Husni: No.

Sri Ram: To the best of your knowledge, who had decision-making power?

Husni: Datuk Seri Najib Tun Abdul Razak.

Husni again highlighted his previous concerns when he told Najib in 2009 that 1MDB should not be formed without a feasibility study, to which Najib said that he would continue with it and told Husni to keep the matter out of his mind.

He then moved on to the sham joint venture (JV) with PetroSaudi International with which 1MDB ended up haemorrhaging US$700 million to fugitive financier Low Taek Jho, or Jho Low, saying that he advised Najib against it but the Pekan member of parliament and the then finance minister told him to not interfere in 1MDB.

"[Then regarding] the joint venture with PetroSaudi International, I told him, 'First there is no oil well yet. [If] there is no petrol that means we will lose the investment. [And] 1MDB has no track record on petroleum.' Thirdly, [I said,] 'Why don't we let Petronas [handle it as they have the expertise?]'

"Then he told me don't interfere anymore. It [showed the] power [was] with him [because] there [was] no discussion," said the former minister.

Husni was released from the stand by Justice Sequerah as both the prosecution and defence had no more questions for him.

Sham PetroSaudi JV

On Tuesday, former managing director of Deutsche Bank (M) Bhd Jacqueline Ho Yek Wan testified that 1MDB had sought and obtained approval from Bank Negara Malaysia for 1MDB to remit US$1 billion to acquire a 40% stake in 1MDB PetroSaudi British Virgin Islands' account with BSI bank.

However, the 1MDB management at the last minute instructed Deutsche Bank to transfer out the US$1 billion of 1MDB funds to two bank accounts in two tranches. One tranche was US$300 million to a JPMorgan bank account and the remaining US$700 million to an RBS Coutts bank account.

Deutsche Bank remitted the money on Sept 30, 2009. On Oct 2, 2009, RBS Coutts contacted Deutsche Bank to ask for the name of the recipient of the funds. Ho said she contacted Shahrol and he told her that the name was a certain Good Star Ltd and that the company was a wholly-owned subsidiary of PetroSaudi International Ltd and they wanted the funds transferred there.

The JV turned out to be a sham and Good Star was a company that was actually linked to Jho Low, who made off with the US$700 million.

Beneficiary of US$700 mil Good Star transaction

In the opening statement of the trial in 2019 by Sri Ram, he said that they would show that Najib had received US$20 million in two tranches in his personal accounts from the US$700 million by Jho Low.

The Edge is covering the trial live here.

Users of The Edge Markets app may tap here to access the live report.

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