KUALA LUMPUR: There was more confirmation of how 1Malaysia Development Bhd (1MDB) had been nothing but an unmitigated disaster after it entered into a joint venture (jv) with PetroSaudi International Ltd (PSI) to undertake so-called oil and gas exploration activities.
This was affirmed by the former chief executive of the sovereign wealth fund, Datuk Shahrol Azral Ibrahim Halmi, after he was questioned under cross-examination while testifying in the 1MDB trial involving former prime minister Datuk Seri Najib Razak.
The 49-year-old also revealed that PSI owed 1MDB US$2.2 billion when he last checked before leaving the fund in 2015.
It was revealed that apart from pumping in money into the venture, 1MDB had also given a US$500 loan to PSI at 8.67 per cent interest.
However, the fund only saw US$41 million returned in the first year and never got a single sen after that.
Lead defence lawyer Tan Sri Muhammad Shafee Abdullah, who seemed amused upon hearing that 1MDB had actually loaned money to PSI, asked Shahrol whether he knew one needed a money lender’s licence before giving others money and charging interest on it.
Shafee: Was 1MDB empowered to do money lending?
Shahrol: Yes
Shafee: Really?... Did 1MDB have a money lender’s licence from Bank Negara?
Shahrol: No
Shafee then chided Shahrol by saying that even Chettiars need a licence before they lend out money.
The witness, who has been on the stand since Sept 23, did not say anything upon hearing the lawyer’s remark.
It was previously recorded that 1MDB had entered into the joint venture with PSI by pumping in US$1 billion in 2009. This gave it a 40 per cent stake in the venture while the balance of 60 per cent was held by PSI, which did not contribute any money but put in its so-called assets as capital.
However, it has since been discovered that a Turkmenistan oil field, purportedly valued at US$3.51 billion did not belong to PSI while an Argentinian oil field was worth only US$108 million.
In another development today, Shahrol denied that he was part of a plot to steal 1MDB money.
He rebutted the accusation after Shafee questioned him about 1MDB’s planned venture with French energy company GDF Suez.
Shafee raised the issue after referring to minutes which had been prepared even before the meeting actually took place in 2010.
However, Shahrol said this could have happened as a result of earlier discussions between 1MDB representatives, namely fugitive businessman Low Taek Jho and 1MDB’s former investment officer Nik Faisal Ariff Kamil (who is also on the run).
Shafee: Nik Faisal already prepared the minutes before the meeting took place. He must have a special talent to know what is going to happen before it happens.
Shahrol: I can’t say how it happened... maybe it was based on earlier discussions
Shafee: You are just guessing
Shahrol: Yes... the same way you guessed that Nik Faisal has special talent
Shafee: I put it to you that you are part of a conspiracy with Jho Low and Nik Faisal.
Shahrol: I disagree
Shafee: You are like a Malay proverb... Cuba menegakkan benang yang basah (trying to defend the indefensible)
Shahrol: I disagree
The trial before judge Collin Lawrence Sequerah continues.
Najib, 66, is facing 25 charges of money laundering and abuse of power over alleged 1MDB funds in his AmBank accounts.
He is accused of abusing his position to obtain RM2.28 billion in bribes in February 2011 and December 2014.
He is also said to have transferred RM2.28 billion in illegal funds to his bank accounts and to have subsequently used the money.