Najib questioned RM5b bond issuance postponement: Ex-1MDB board director

1MDB TRIAL | Ismail testified that then prime minister Najib Abdul Razak questioned why the then 1MDB board member and its then CEO Shahrol Azral Ibrahim Halmi agreed to put off the issuance of the RM5 billion Islamic Medium Term Notes (IMTN).

During today’s RM2.28 billion 1MDB corruption trial against Najib, 13th prosecution witness Ismee claimed that Najib asked this during a meeting between the former prime minister, the witness and Shahrol at the accused’s house at Langgak Duta, Kuala Lumpur, on the night of May 22, 2009.

In previous proceedings before the Kuala Lumpur High Court, ninth prosecution witness Shahrol testified that then Terengganu Investment Authority (TIA) morphed into 1MDB in 2009, following trouble with the Terengganu palace over the RM5 billion bond issuance.

Shahrol then testified that the troubles led to transfer of ownership of TIA from the Terengganu Menteri Besar Incorporated to the Minister of Finance (Incorporated) in July that year, leading to its transformation into 1MDB.

 He testified then that trouble began on May 22, 2009, when the TIA board issued a circular of a directors resolution which stated that the RM5 billion bond issuance by the company was to be suspended, and that the directors also ordered that Shahrol and all other directors were barred from handling the bond issuance.

Shahrol said he and Ismee were summoned by Terengganu ruler Sultan Mizan Zainal Abidin to Istana Terengganu in Kuala Lumpur that day, where the incensed ruler allegedly decreed them to sign a resolution to postpone the issuance of the RM5 billion IMTN bond issuance.

The document was authored by Tengku Rahimah Puteri Sultan Mahmud, the elder sister of the Terengganu ruler, a TIA director and a prominent corporate figure. Sultan Mizan was also the then Yang di-Pertuan Agong.

This document contained the TIA directors' resolution which ordered Aminvestment Bank Bhd to suspend the bond issuance until several conditions were met.

Shahrol had testified that later that evening of May 22, 2009, he was instructed Najib at the latter's Kuala Lumpur residence, where the then premier allegedly asked why the state ruler was angry, among other things.

 During trial proceedings before trial judge Collin Lawrence Sequerah this morning, Ismee corroborated Shahrol’s account about the meeting with the state ruler and the then premier Najib.

The witness claimed that prior to the establishment of TIA in February 2009, he was appointed as a member of the steering committee for the establishment of the state-linked sovereign wealth fund, and that businessperson Low Taek Jho (or Jho Low) were also among the members.

Ismee testified that on arriving at Najib’s house between 8pm and 8.30pm that day, he found only Shahrol there and they waited, before the then premier came down to the living room to meet them a few minutes later.

The witness claimed he then explained to Najib about what transpired with Sultan Mizan earlier that day.

“DS Najib’s response was ‘Why did you sign it?’ and DS Najib also questioned why we did not seek for his Majesty to give more time to them to think.

“The only thing I could say to DS Najib then was that it was a decree from his Majesty so there was that all they could afford to do then.

“I perceived that the reaction and intonation of DS Najib’s voice was that he wanted the IMTN bond to be proceeded with,” the witness said.

Ismee added that at the time, he regarded the matter as outside his authority, and that after having met the state ruler and also then prime minister, he left it to them both to resolve the issue.

Trial before Sequerah continues today as Ismee continues to read out from his prepared witness statement.

Najib is on trial for four counts of abuse of power and 21 counts of money laundering involving RM2.28 billion of 1MDB’s funds.

Besides being former prime minister, Najib also used to be finance minister and chairperson of 1MDB’s board of advisors.

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