KUALA LUMPUR (Aug 28): Former premier Datuk Seri Najib Razak played a pivotal role in amending the 1Malaysia Development Bhd (1MDB) Articles of Association in order to put him in position of control of the company in a bid to enrich himself, said the prosecution in his 1MDB trial.
Former Federal Court judge Datuk Seri Gopal Sri Ram said there are four phases to the transaction that resulted in the massive amount of RM2.28 billion ending up in Najib's AmBank accounts.
Central to the scheme is Penang-born businessman Low Taek Jho or Jho Low, whom Sri Ram described as a "fugitive of justice".
"The prosecution will prove that the accused (Najib) by his words and conduct made it clear to 1MDB’s officers, its board and others that Jho Low was his alter ego.
"In truth, Jho Low was the accused’s mirror image. The prosecution will establish facts which will give rise to an irresistible inference that Jho Low and the accused acted as one at all material times," the former Federal Court judge said in his opening statement to the case.
He further pointed to the four phases, the first of which occured during the formation of 1MDB's precursor Terengganu Investment Authority (TIA) in 2010.
The act involving 1MDB, where Najib and Jho Low acted as one, came in four phases, whereby:
1. Najib, through Jho Low and Tarek Obaid, formed a 40:60 JV between 1MDB and PetroSaudi International Ltd (PSI) called Project Aria. The JV company is 1MDB Petro Saudi Ltd.
In 2009, 1MDB took up a US$1 billion loan to pick up the 40% stake, but US$700 million was paid to Jho Low’s Good Star Ltd that had nothing to do with the JV.
Goodstar was formed five months before the JV was inked. Further, the JV was inked with PetroSaudi Holdings (Cayman) Ltd and not PSI. Good Star was falsely presented as a wholly-owned unit of PSI.
Later in 2010, 1MDB converted its supposed US$1 billion equity in the JV to Murabaha notes, and was required to provide another US$1.5 billion to the JV. 1MDB paid US$500 million, which is now missing.
Another US$330 million 1MDB funds eventually was transferred to Good Star.
Of the first US$700 million channeled to Good Star, the money was distributed to several individuals, including Prince Faisal and Prince Turki, the latter a friend of Jho Low.
Prince Turki received US$24.5 million, and paid US$20 million to Najib.
2. Najib received another RM90.9 million from 1MDB’s dealings — via five subsidiaries — in power projects, namely acquisition of Tanjong Energy Holdings Sdn Bhd and Mastika Legenda Sdn Bhd, the latter owning 75% in Genting Sanyen Sdn Bhd.
1MDB appointed Goldman Sachs to arrange two loans — RM6.17 billion and US$1.75 billion — for the acquisition of Tanjong.
Of the US$1.75 billion notes, US$577 million was went to Aabar Investment PJS Ltd (BVI) for security deposits for the guarantee issued by Aabar’s parent IPIC on the notes. From Aabar, US$295 million and US$133 million was paid to Blackstone Asia — a company controlled by Jho Low associate Eric Tan Kim Loon — in 2012.
For Mastika, the purchase price was RM2.75 billion but 1MDB raised US$1.75 billion, again through Goldman, and another RM700 million — marking an excess of RM3 billion.
1MDB paid the balance to Aabar BVI, again as security deposit for IPIC’s guarantee on the new Goldman notes. Aabar paid US$291 million to Cistenique Investment Fund (CIF), US$76 million and US$96 million to Enterprise Emerging Market Fund (EEMF).
Note that Aabar also received options to take a 49% stake in 1MDB Energy (Langat) Ltd and 1MDB Energy (Langat) Sdn Bhd. This relates to Phase 4.
EEMF and CIF later channeled the monies to Blackstone. Aabar also paid US$75 million to Blackstone. From there, Blackstone channeled US$30 milliom into Najib’s account in Oct-Nov 2012.
3. In 2013, 1MDB and Aabar formed a 50:50 JV called ADMIC, supposedly to develop TRX. Goldman Sachs raised US$3 billion loan for the said purpose. IPIC guaranteed Aabar’s investment, and MoF gave a guarantee for 1MDB’s investment via a letter of support.
After deducting Goldman’s fee, US$2.721 billion of the loan was channeled to 1MDB Global Investment Ltd. From there, US$1.06 billion was paid to Devonshire Funds Ltd (US$646.46 million) and EEMF (US$414.14 million) in 2013.
Devonshire paid US$430 million to Eric Tan-controlled Granton Property Holdings Ltd, which later transferred it to Tanore Finance, again controlled by “Jho Low’s shadow” as described by Sri Ram.
Devonshire transferred another US$210 million to Tanore Finance Corp. EEMF, too, transferred another US$250 million — making the total US$890 million in Tanore.
Tanore transferred US$681 million (RM2.08 billion) to Najib’s accounts in March-April 2013. The ADMIC JV never took off.
4. For the fourth stage, Sri Ram highlights that 1MDB monies were transferred via Aabar PJS to Vista Equity and Blackrock Commodities (Global) Ltd, from which over RM50 million was transferred into Najib's account.
In 2014, 1MDB Energy Holdings Ltd took two loans from Deutsche Bank Singapore, which were guaranteed by 1MDB Energy (US$250 million) and 1MDB Langat (US$975 million).
Of the US$250 million loan, US$175 million was transferred to Aabar BVI — to part redeem Aabar BVI’s options on the two 1MDB Langat companies’s 49% stake. Aabar BVI paid US$19 million to Eric Tan-controlled Affinity Equity International Partners Ltd.
Affinity transferred US$1.89 million to Blackrock Commodities, which is also controlled by Tan. From there, £750,000 (RM4.09 million) was transferred to Najib in June 2014.
Of the US$975 million loan, US$223.33 million and US$457.98 million was transferred to Aabar Investment PJS Ltd (Seychelles). From there, US$225 million went to Vista Equity, which transferred RM45.84 million to Najib in five tranches.
As for the 21 AMLA charges, Najib transferred RM2.03 billion out of the RM2.08 billion received from Tanore in 2013 in his AmBank 694 account back to Tanore.
Of the balance, RM22.65 million was used to pay four entities and five individuals via cheuqes to his benefit. A remainder of RM162.44 million was transferred to another of his AmBank account ending 880. These transactions.