KUALA LUMPUR - The management of 1Malaysia Development Berhad (1MDB) should have done the due diligence about the existence of PetroSaudi International Ltd (PSI) before 1MDB’s money being channelled into PSI for a joint venture purpose, the High Court was told today.
1MDB’s former general counsel Jasmine Loo Ai Swan, 50, who made the admission during cross-examination by Tan Sri Muhammad Shafee Abdullah, said that it was not the job of Datuk Seri Najib Razak, who was the chairman of the 1MDB board of advisers to find out the existence of PSI in Saudi Arabia.
In 2019, former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi testified in the same trial that the joint venture deal between 1MDB and PSI in 2009 was a failure.
For the record, in the joint-venture agreement which was signed on Sept 28, 2009, 1MDB ended up pumping in US$1 billion for a 40 per cent stake in the company while the PetroSaudi Holdings Cayman (a company which was purportedly a subsidiary of PSI) injected its so-called assets worth US$108 million for a 60 per cent stake.
Earlier, Muhammad Shafee suggested to Loo that when dealing with 1MDB, it involves sums that were "astronomical" and as general counsel, Loo would have to be satisfied that she was dealing with the right entity.
The witness agreed.
Muhammad Shafee: How much do you know about PSI?
Loo: At that time, I only knew based on the documents given to me such as the letters from the banks and information given to me by Datuk Shahrol Azral Ibrahim Halmi (former 1MDB chief executive officer) as well.
Muhammad Shafee: Was it the Prime Minister's job to determine if PSI exists in Saudi Arabia?
Loo: No.
The lawyer also suggested it was the job of the legal consultant for 1MDB which was Wong & Partners and Loo herself to conduct the due diligence regarding PSI before entering into any dealing with 1MDB, to which Loo answered, "Yes”.
While Muhammad Shafee maintained that PSI in Saudi Arabia did not exist, Loo countered that there would have been some information available to her which would have referred to PSI.
Muhammad Shafee: I’m putting it to you that it cannot be there. The company doesn't exist (in Saudi Arabia). The entire thing about PSI is a total con job.
Loo: In hindsight, yes.
Meanwhile, Muhammad Shafee suggested that during Loo's tenure in 1MDB, she had operated based on the assumptions that Najib wanted to be the first person to sign any documents in relation to 1MDB dealings before it was sighted by the board of directors, as part of a larger top-down approach in running the company.
To this, Loo said, "Not as specific as that.”
"These were the things conveyed to me by fugitive businessman Low Taek Jho (Jho Low) and Shahrol Azral. I relied on him (Shahrol) as he was my boss,” said Loo.
Najib, 70, faces four charges of using his position (as prime minister) to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.
The trial before Datuk Collin Lawrence Sequerah continues tomorrow. - BERNAMA