Kuala Lumpur: Former 1Malaysia Development Berhad (1MDB) Chief Executive Officer (CEO) told the High Court Tuesday the real shareholder of 1MDB was the Government and the show was run by the former Prime Minister Datuk Seri Najib Tun Razak.
Mohd Hazem Abd Rahman, 47, said even though the 1MDB board has the power to deliberate and make decisions, it will all came down to Najib as he held the veto power.
He said this when referred to Article 117 of the Memorandum and Articles of Association (M&A) of 1MDB, by Najib’s lead counsel, Tan Sri Muhammad Shafee Abdullah at Najib’s trial before Justice Collin Lawrence Sequerah.
Article 117, among others, stated that any critical matters including the removal of directors, financial commitments and changes to the senior management team would require the approval of the prime minister.
The lawyer questioned the 10th prosecution witness if he had ever come across any occasion that Najib had invoked Article 117 to which the witness replied: “What do you mean by ‘invoked’?”
Muhammad Shafee: As in, he used matters in Article 117 to ‘flex’ his powers.
Mohd Hazem: No.
Muhammad Shafee: You can say for certain that Datuk Seri Najib as the then PM never invoked Article 117?
Mohd Hazem: Not in that manner. As far as I understand, critical matters needed to be approved by Datuk Seri Najib.
Muhammad Shafee also questioned the witness whether he was aware that Najib was wearing many hats during the time, namely as the prime minister, finance minister and the chairman of 1MDB’s board of advisers, and Article 117 specifically relates to Najib’s role as the then prime minister.
Mohd Hazem: Regardless of which ‘hat’ Datuk Seri Najib was wearing, his approval was required.
Muhammad Shafee: So you would take it as he had the powers to decide?
Mohd Hazem: Yes.
Muhammad Shafee: That is the wrong way to do it. I put it to you that your interpretation is wrong.
Mohd Hazem: I disagree with you.
On another issue, Mohd Hazem agreed with the counsel’s suggestion that the commission of RM801 million paid to Goldman Sachs for the acquisition of 1MDB Energy (Langat) Limited was “very high”.
The witness also agreed with Muhammad Shafee’s suggestion that there were other cheaper means of raising the financing.
Muhammad Shafee: What other means could have been used to raise cheaper financing?
Mohd Hazem: They could have done a competitive bidding process among the banks.
Muhammad Shafee: But there was no bidding process.
Mohd Hazem: I don’t think there was. The 1MDB could have used a government guarantee or raised funds with local banks instead.
Najib, 67, faces four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.
The trial before Justice Collin Lawrence Sequerah continues tomorrow.
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