KUALA LUMPUR: Local banking group AmBank found itself dragged into the 1Malaysia Development Berhad (1MDB) mess after it was revealed that someone from the bank may have conspired with Low Taek Jho @ Jho Low to rip off the sovereign wealth fund.
The scam between that someone in Ambank and Low, who is widely regarded as the brains behind the 1MDB scandal, saw the Penang-born businessman pocketing about half a billion ringgit.
In the end, the High Court heard, the losers were not only 1MDB and its predecessor the Terengganu Investment Authority (TIA), but also Ambank’s shareholders.
Others who got the short end of the stick included entities like the Employees Provident Fund (EPF), Social Security Organisation (Socso) and a number of insurance companies.
Revealing how Low had pulled off the scam, lawyer Tan Sri Muhammad Shafee Abdullah said it happened during the issuance RM5 billion bonds by TIA, and later 1MDB in 2009.
He said at that time Low already had companies linked to him, namely the Aktis Capital Singapore Pte Ltd, and the Capital Group which was run by the fugitive businessman’s father, ready to buy the bonds at below market value.
Shafee, who was cross-examining prosecution witness former 1MDB chief executive officer (CEO) Datuk Shahrol Azral Ibrahim Halmi, referred to agreements which had been inked by the companies and Ambank.
Under the agreement, Ambank. which had been appointed as the agents for the bonds, sold the Islamic Medium Term Notes (IMTNs) to the two companies at below par value.
The bank, it was revealed, sold the bonds at 88 per cent of their face value to the two companies.
However, days later, Low got the same bank to find new buyers - namely EPF, Socso and the insurance companies - to purchase the bonds at full market value.
All this, he said, was done without Shahrol or the 1MDB and TIA board of directors having a clue about what was going on.
“You guys issued RM5 billion worth of bonds but Ambank said they can’t sell at face value and sold them to the Jho Low-linked companies at just 88 per cent of the price.
“Then, within days the same bank managed to get EPF, Socso and the others to buy back from Jho Low’s companies at full price…he walked away with almost half a billion ringgit, and Malaysians and all the rest like the Ambank shareholders, EPF and Socso got screwed over twice,” he said.
Shahrol, who seemed to be taken aback by what he was hearing, later nodded in agreement to what Shafee said.
The 49-year-old is the ninth prosecution witness in the trial involving former prime minister Datuk Seri Najib Razak.
Najib, 66, is charged with misappropriating RM2.28 billion of 1MDB funds, money laundering and abuse of power.
The trial before High Court Judge Collin Lawrence Sequerah continues.