KUALA LUMPUR (Sept 23): The Ministry of Finance (MoF) was said to have been pressured into issuing the government guarantee for the RM5 billion Islamic medium term notes (IMTN), in order to meet a tight one-month deadline set by fugitive businessman Low Taek Jho, according to the testimony by Datuk Shahrol Azral Ibrahim Halmi, the ninth prosecution witness in the 1Malaysia Development Bhd (1MDB)-Tanore trial, at the High Court today.
During the examination-in-chief by senior deputy public prosecutor Datuk Seri Gopal Sri Ram, Shahrol, the former chief executive officer of 1MDB and its precursor Terengganu Investment Authority (TIA), said Low — better known as Jho Low — had set end-May 2009 as the deadline for the ministry to issue a government guarantee to facilitate the issuance of the bonds.
The deadline was about a month after TIA issued a letter outlining the key terms of the IMTN programme, dated April 26, 2009.
Shahrol said he thought the targeted date was "very aggressive", causing discomfort at MoF, although Jho Low told him that the deadline was necessary to ensure Mubadala Real Estate's planned investment for a luxury hotel in Pulau Bidong could go through.
"I was informed by Jho Low that the deadline was to ensure that Mubadala's investment could be executed. He also told me to push MoF. He also said that he would also push MoF (from the) top-down," the witness told the court.
"What did he mean when he said top-down?" asked Sri Ram.
"Top-down meaning that the directive would be given from the Minister of Finance himself, Datuk Seri Najib," said Shahrol.
"Do you know whether the directive was eventually [carried out]?" asked the senior deputy public prosecutor.
"I have no knowledge of that," said the witness.
There was also a TIA letter dated May 4, 2009, directed to Najib, for the purpose of updating him on the current status of the IMTN issuance as well as the discussion between TIA and MoF, which had requested for a letter of comfort (LOC) to be issued by the Terengganu State Government before a government guarantee can be issued.
Although Shahrol had signed off on the letter, he said Jho Low was the one who set its contents.
Shahrol said he had copied the letter to Treasury Secretary-General at the time, Tan Sri Wan Abdul Aziz, as a way to pressure him into speeding up the issuance of the government guarantee.
"I did that because Jho Low had told me that by writing a letter to Datuk Seri Najib and copying it to the Treasury Sec-Gen, it would make the Treasury Sec-Gen feel obliged to speed up the process of the government guarantee issuance," he said.
Prior to this, Shahrol had identified in court the characteristics of letters written by Jho Low based on the salutations used, the style of language used and that his letters would have bullet points to illustrate his points.
The witness was asked to identify various letters allegedly drafted by Jho Low.
He had also testified that he had checked some of the directives given by Jho Low and it was consistent with Najib's, and that on bigger issues, he would have the matter in writing with the former premier.
Najib faces 25 charges of money laundering and abuse of power involving billions of ringgit that were also purportedly sourced from the troubled sovereign wealth fund.
The Edge is reporting the proceedings of the 1MDB-Tanore trial live.