Board of directors misled on 1MDB investment monies coming back - Witness

KUALA LUMPUR: The High Court today was told that 1Malaysia Development Berhad (1MDB) board of directors (BOD) was misled when its management had given the illusion that 1MDB investment monies were coming back into the state fund in 2014.

Former 1MDB non-executive director Tan Sri Ismee Ismail, 58, said this when he was asked by lead counsel Tan Sri Muhammad Shafee Abdullah to comment on a briefing by 1MDB former chief financial officer (CFO) Azmi Tahir during a board meeting on Oct 20, 2014.

Muhammad Shafee was referring the 13th prosecution witness to a specific briefing by Azmi during the board meeting where he told the BOD that a total of US$870 million had been redeemed as of October 2014 and another US$300 millon will be redeemed within the next few days.

Ismee said at the material time, the BOD had no idea that the monies, which Azmi said went into Brazen Sky Ltd were in fact money borrowed by 1MDB from Deutsche Bank.

The court had earlier heard that Brazen Sky Ltd is a Special Purpose Vehicle (SPV) set up by fugitive financier Low Taek Jho or Jho Low and his associates to repatriate investment monies by 1MDB.

Muhammad Shafee: You see how Azmi lied to the board. What he did was, all these money purportedly went into Brazen Sky but omitted the part where the money went back into a shell company named Aabar Investments PJS Ltd. 1MDB directors would not know this aspect because you have to be dependent on your management's honesty. Now that you know the truth, what is your comment?

Ismee: I guess the same thing I had said earlier. Bulan puasa, tak sedap nak cakap. (It is inappropriate to talk about it during this fasting month).

Muhammad Shafee: Tan Sri, we are doing a judicial inquiry. You still have to tell the truth during bulan puasa.

Ismee: I have said this in November last year and I will say the same thing. The BOD was misled.

The court previously heard testimonies that Aabar Investments PJS Ltd (Aabar BVI) was not the same as Aabar Investment PJS, which is the actual subsidiary of International PetroIeum Investment Company (IPIC).

Earlier, the witness agreed to a suggestion by Muhammad Shafee that in order to carry out an initial public offering (IPO), the management of 1MDB has convinced the board of directors (BOD) to borrow US$250 million and US$975 million from Deutsche Bank Singapore, respectively in May and Aug, 2014.

The court heard a total US$223.33 million and US$457.98 million of the loan were used.

Previously, former 1MDB chief executive officer (CEO) Mohd Hazem Abd Rahman confirmed that a total of RM49 million originating from the said bank loans taken by 1MDB wound up in Najib's bank account in AmIslamic Bank.

On the first day of the 1MDB trial in August 2019, lead prosecutor Datuk Seri Gopal Sri Ram had in the prosecution's opening statement said that the prosecution would show that some money originating from a US$250 million loan and a US$975 million loan taken by 1MDB subsidiary 1MDB Energy Holdings Ltd from Deutsche Bank Singapore had allegedly ended up in Najib's bank account.

Najib, 68, is facing 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 judge Datuk Collin Lawrence Sequerah continues tomorrow.

-- BERNAMA