This article first appeared in The Edge Malaysia Weekly on November 28, 2022 - December 4, 2022
AS the Malaysian government had not taken the initiative to reward whistleblower Xavier André Justo for his role in helping expose the 1Malaysia Development Bhd (1MDB) scandal, for which he spent months in a Thai prison, The Edge Media Group chairman Tan Sri Tong Kooi Ong decided to step in.
Tong told the High Court at the 1MDB-Tanore trial that he thought that Justo ought to be compensated for his trouble and time served in jail, so he gifted Justo US$2 million in 2019 for his help in exposing the wrongdoings of the state-owned strategic investment fund in relation to its dealings with PetroSaudi International Ltd (PSI).
“I thought he deserved to be paid and I thought the government of Malaysia should have awarded him something but in the absence (of this), I, Tong Kooi Ong, decided I should help him,” Tong told the court.
The business analyst and economist described how Justo had to endure a lot when he was jailed in Thailand for actions that saved Malaysia.
“I felt that Justo, for no whim and fancy and who had nothing to gain, paid a huge price to be jailed in Thailand for an action that saved Malaysia from the world’s largest kleptocracy.”
Justo, who had previously worked with PSI, was arrested in Bangkok in June 2015 on blackmail charges, and paraded as a hardcore criminal before being incarcerated in a Thai prison for 18 months.
Tong explained that information from Justo helped The Edge establish facts and proof for the investigative reporting that the publication had done, as it only possessed circumstantial evidence at the time.
The exposés in March 2015 led to global investigations worldwide, including in the US, Singapore and Switzerland, that found, among others, billions of dollars belonging to 1MDB had been stolen.
“It was obvious to us prior to February 2015 that although we at The Edge were looking at 1MDB, clearly things were going wrong (at 1MDB). We had circumstantial evidence to put together, but after we met Justo, there were facts,” Tong added when quizzed by senior deputy public prosecutor Datuk Seri Gopal Sri Ram.
Tong emphasised that the data from Justo was not stolen as Tong’s own lawyers had contacted PSI to verify the fact and PSI replied they had never reported it as stolen.
What started as some sleuthing over a fishy investment by 1MDB in the 1MDB-PetroSaudi joint venture (JV) in 2009 prompted Tan Sri Nazir Razak — the younger brother of the former prime minister Datuk Seri Najib Razak — to seek Tong’s help to look into the matter as he feared his brother might have been duped into greenlighting the deal.
Tong, the prosecution’s 43rd witness, said he was asked by Nazir to look into the dealings of 1MDB, formerly known as Terengganu Investment Authority (TIA) in 2009, which the finance ministry brought into its fold after the state government backed down from the proposed establishment of the state sovereign fund.
By this time, the government had agreed to a RM5 billion Islamic medium-term notes (IMTN) issuance, the mandate of which was given to AmBank. However, 1MDB only obtained RM4.3 billion of the amount raised.
“The reason I got involved with 1MDB [was because of] the difficulty of the case. It is exactly because of this transaction that [Nazir] approached me to see if there was something wrong with 1MDB. We looked into it and tried to understand how the transaction was not normal,” Tong, who holds a Master’s in Economics from Simon Fraser University, Vancouver, told the trial.
The prosecution had previously shown that out of US$1 billion — part of the RM5 billion IMTN — that 1MDB initially invested in its JV with PSI, only US$300 million was received by the 1MDB-PetroSaudi Ltd JV company as US$700 million was illegally transferred to Good Star Ltd, a firm controlled by businessman Low Taek Jho (Jho Low), now a fugitive.
Tong said he believed the 1MDB management, including its former managing director Datuk Shahrol Azral Ibrahim Halmi, could have misled Najib, the then-prime minister and finance minister.
“The management was one of the parties that misled the [then] PM ... Clearly, Jho Low said he was not part of the management,” Tong said.
The Edge’s investigative reports on 1MDB caught the attention of Jho Low and Najib’s former media adviser Paul Stadlen.
Tong said he first met the young businessman through a reporter at The Edge at Jho Low’s behest. In the first of two meetings, Low had told him that The Edge was wrong in linking him to 1MDB as he claimed he had nothing to do with the company.
“During the second meeting, he added that Jho Low said he knew Najib and that we (The Edge) should be careful over our reports on 1MDB.”
Asked by Sri Ram what he thought the words meant, Tong replied that it was meant to threaten the publication but he chose to ignore it.
Similarly, in a meeting between Tong and Stadlen — a Briton who was previously charged with money laundering involving RM7.1 million in Malaysia, although the charges were later withdrawn when he agreed to refund a specific portion of the funds — Stadlen had also cautioned The Edge chairman that the Prime Minister’s Office (PMO) was “all-powerful” and that The Edge should be careful about its coverage of 1MDB.
He said Stadlen had tried to be friendly and to convince him to stop writing about 1MDB as “it was making many people at the PMO upset”.
The Edge owner said that on March 7, 2015, he met Najib at his Jalan Langgak Duta home, where he had tried to warn the then-premier over what was going on in 1MDB and over Jho Low’s purported wrongdoing with regard to the PSI deal, but was shown the door.
Subsequently, Tong added The Edge was suspended in July 2015, and as a result of the investigative reports by the publication, the Inland Revenue Board had also investigated him for money laundering and tax evasion. He was also barred from leaving the country.
The suspension of the publication was lifted after nearly three months by the High Court, and its decision upheld by the Federal Court.
Najib an affable, polite, nice guy, say witnesses
Over the past two weeks, two prosecution witnesses in the 1Malaysia Development Bhd (1MDB)-Tanore trial — former Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah and The Edge Media Group chairman Tan Sri Tong Kooi Ong — described former prime minister Datuk Seri Najib Razak as a polite man, affable and nice.
Their description of Najib as such centred on the portions of their testimony where they suggested that action be taken against certain individuals who were uncooperative and hampering government business or involved in illegal activity detrimental to the government.
Irwan told the court of an instance in which he approached Najib, following the parliament’s Public Accounts Committee (PAC) recommendations on the troubled sovereign fund in 2016.
Irwan, the prosecution’s 42nd witness, said he told Najib that former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi ought to be charged for the quagmire that the strategic investment company was in. The former premier kept mum, however, which Irwan attributed to Najib’s “nice guy” demeanour.
“The third thing mentioned specifically by PAC was to charge [Shahrol] and also the [former] board chairman, that is, Tan Sri Lodin [Wok Kamaruddin].
“I told [Najib that the authorities need to] charge these two fellows,” the witness said during examination in chief by senior prosecutor Datuk Seri Gopal Sri Ram.
Sri Ram: You told him they need to be charged?
Irwan: But he’s a nice man; he just kept quiet. Knowing Datuk Seri Najib, he’s a nice man.
Sri Ram: He just kept quiet?
Irwan: He just kept quiet. So, that’s it.
1MDB did not actually recommend, however, that Shahrol or Lodin be charged, but instead noted weaknesses in 1MDB’s governance by the management and board of directors.
The PAC report had said it believed Shahrol needed to take responsibility for those weaknesses and blunders, and urged law enforcement agencies to carry out further investigations into Shahrol and others involved in 1MDB’s management. It did not mention Lodin’s name in such recommendations.
‘Sometimes he is too polite, to my irritation’
Cross-examined by lead defence counsel Tan Sri Muhammad Shafee Abdullah last week, Tong agreed with the lawyer that Najib was the “most polite person”.
Shafee: Do you know Najib is the most polite person you have met?
Tong: That — I finally agree with you.
Shafee: Sometimes he is too polite, to my irritation … Had Najib ever been rude to you?
Muhammad Shafee: If at all, he was over-polite.
Tong had testified earlier that during his meeting with Najib in March 2015, he explained that money meant for the joint venture with PetroSaudi International was stolen and US$700 million was siphoned off to fugitive financier Low Taek Jho (Jho Low)-linked Good Star Ltd. He also informed Najib that Jho Low ought to be prosecuted.
Tong said Najib did not say a word, however, but showed him the door instead, ending their meeting.
The comments about Najib’s disposition and demeanour came about after Shafee indicated that Tong might have misinterpreted Najib’s actions.
Shafee: You may have misinterpreted. You were seated at the reception area nearest to the door; he walked you to the door and said ‘thank you’. He terminated the conversation.
Tong: I wish he did that.
Shafee: He didn’t open the door, and say ‘Tong, get out’?
Tong: He did not ask me to leave ... After I explained the hand-written notes and the problems arising [from that], he told me he would close 1MDB.
Tong went on to explain that Najib said he would shut down the troubled fund, following the former’s explanation.
Shafee: That he would shut it down?
Tong: That he would shut it down. I then proceeded to say, ‘But someone should be held [accountable] … [From my] briefing notes, [of which] you have taken a copy, I clearly showed [the] money was diverted to [Jho Low-owned] Good Star Ltd, not PetroSaudi. Jho Low should be [held accountable] and prosecuted.’
From then on, he never said a word. He stood up and walked to the door. He opened the door. I stood up and then I left.
Shafee persisted with this line of questioning and asked Tong whether he would be surprised that Najib had walked Shafee, a “mere” lawyer, to the door every time he visited his home.
Shafee: I’m putting it to you, maybe you were sensitive to the fact your briefing didn’t [meet] the kind of expectations [you had, so] you think he was showing you the door?
Tong: In my mind, the gesture was not what you would have described it. I was surprised that he just stood up, walked to the door and opened it without saying a word. After I said it [that someone should be held accountable], he didn't say anything. He stood up and opened the door. That’s the totality of what happened.
Irwan was paid hundreds of thousands in allowances annually, even though BoA never met
Over four years, from 2012 to 2016, former Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah received hundreds of thousands of ringgit in allowances annually as a member of 1Malaysia Development Bhd’s board of advisers (BoA) even though he did not attend a single meeting as not a single meeting was ever convened.
Testifying in the ongoing 1MDB-Tanore trial, the prosecution’s 42nd witness told the court that he was promoted to the position of Treasury secretary-general in August 2012 and, based on that post, was appointed to 1MDB’s BoA by then premier Datuk Seri Najib Razak. He was paid about RM25,000 in allowances “consistently each month beginning Aug 26, 2013 until 2015”.
Irwan testified that, prior to receiving the allowance on a monthly basis, he had also received a cheque for RM221,774 in August 2013 for outstanding payment (bayaran tertunggak) for his role from August 2012 to August 2013.
The former civil servant turned aspiring lawyer asserted that he did not ask for this payment but that it was made to him by 1MDB through a company cheque. He said he received the allowance until 2016, when the BoA was dissolved by Najib, following a Public Accounts Committee probe into 1MDB.
Even after the BoA’s dissolution, Irwan continued to receive RM25,000 a month — but in the capacity of 1MDB chairman. It was a role he held until May 2018, when the Pakatan Harapan coalition took control of Putrajaya.
“After the BoA was dissolved, I received an allowance [in my capacity] as the 1MDB chairman, also amounting to RM25,000 per month. But in 2016, the payment was made in a ‘lump sum’ amounting to RM300,000. This payment was also made through a 1MDB cheque to me,” said Irwan. However, he did not elaborate on payments after 2016.
No meetings held, but Irwan offered ‘unofficial advice’
Irwan also testified that since he was appointed as a member of the BoA, “he had never been called or received an invitation” to attend any meeting at the troubled strategic development company.
“For me, the meetings were never held because I never saw the BoA meeting minutes. Although [Najib] was the BoA chairman, he himself never informed me of any meetings regarding the BoA.”
He added that to his knowledge, the BoA was led by Najib. He and Tan Sri Dr Ali Hamsa, the former chief secretary to the government, were also part of the board. Irwan said he did not know any of the other members who were appointed as no meetings were held.
“I asked [the chief secretary] whether or not there were BoA meetings, but [the chief secretary] answered that he also did not know, and was not invited to any meetings related to 1MDB’s BoA since he was appointed.”
Irwan said he did not ask Ali Hamsa again, or Najib for that matter, about the BoA meetings.
Even though the BoA never met, Irwan advised Najib “unofficially” on 1MDB-related matters in his capacity as Treasury secretary-general, who oversaw companies under Minister of Finance Inc (MoF Inc), he told senior prosecutor Datuk Seri Gopal Sri Ram. “Sometimes, he [Najib] listened, sometimes he [made] his own decisions.”
On the stand last week, Irwan agreed with lead defence counsel Tan Sri Muhammad Shafee Abdullah that he was surprised that the board of directors had never convened a meeting of the BoA for advice as per 1MDB’s memorandum and articles of association, given the enormous problems 1MDB was facing.
Irwan’s testimony echoes that of former chief secretary to the government, Tan Sri Mohd Sidek Hassan, who revealed in June that he was paid RM30,000 a month as a BoA member despite never attending meetings. He received the allowance until his retirement from the civil service in 2012.
After his retirement, 1MDB continued to retain him on the BoA with a monthly fee of RM10,000 effective January 2013, an amount he received every month until June 2015.
Also paid allowance on other boards, but not as high as 1MDB
Irwan testified that he had also served as chairman of the Inland Revenue Board (LHDN), Kumpulan Wang Amanah Persaraan (KWAP) and Public Sector Housing Financing Board (LPPSA).
On the stand last week, he emphasised that his appointments to these boards were made via the relevant statutes of the law and that he was paid allowances and remuneration for his services. However, he could not recall the amounts.
When asked by defence counsel Wan Aizuddin Wan Mohammed if the allowance was equal to that paid by 1MDB, Irwan said it could have been “lower”. He added that there was nothing wrong with receiving the allowances, especially as he paid taxes on them.
Wan Aizuddin: Who decides the amount of allowance?
Mohd Irwan: Either MoF or the board will decide, but they will have to get the approval from MoF.
In this trial, Najib is charged with four counts of abuse of power and 21 counts of money laundering involving RM2.28 billion of 1MDB funds. The trial before High Court judge Datuk Collin Lawrence Sequerah continues on Dec 5.
Letter of support for US$3 bil bond issuance fast-tracked without proper documentation
In March 2013, the cabinet approved a letter of support (LoS) for a US$3 billion bond issuance to raise funds for 1MDB’s joint venture with an Abu Dhabi company, fast-tracking the approval process even though the requisite documents from the state-owned company were lacking, the High Court heard last week in the 1MDB-Tanore trial of former prime minister Datuk Seri Najib Razak.
Former Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah testified that 1Malaysia Development Bhd had not been co-operative with the Ministry of Finance (MoF) as it refused to divulge dealings involving purported investments or to provide the requisite documents, making it difficult for the Treasury to prepare a memorandum to the cabinet for an LoS for the bond issue pertaining to 1MDB’s 50:50 joint investment with Aabar Investments PJS in 2013. Aabar was to obtain the support of its International Petroleum Investment Company (IPIC) while 1MDB would be supported by the MoF.
Irwan said in an email dated March 7, 2013 that Najib’s principal private secretary, the late Datuk Azlin Alias, asked the MoF to expedite its issuance before Abu Dhabi crown prince Sheikh Mohamed Bin Zayed Al-Nahyan’s arrival. He also suggested that a letter of comfort (LoC) be issued as it would not need cabinet approval.
Irwan replied that 1MDB officials, including its then managing director Datuk Shahrol Azral Ibrahim Halmi, were not assisting the ministry to hasten the process, and that Shahrol was being “arrogant”.
“While Azlin asked why the MoF was late in its dealing, I explained that the ministry required 1MDB to furnish the details over the US$3 billion and they would give reasons that all the details are with the PM who is also the finance minister,” Irwan said under cross-examination by defence counsel Wan Aizuddin Wan Mohammed.
“Hence, MoF, especially its officers in the preparation of the memorandum, faced problems in getting the actual picture on the investments that 1MDB wanted to commit. Shahrol would say that the Treasury would have to ask for the documents from Najib and the Prime Minister’s Office.”
Irwan said his subordinates, namely former MoF deputy secretary-general Datuk Siti Zauyah Md Desa and one Afidah Azwa Abdul Aziz had made similar grouses over the matter.
In any event, Irwan said that the memo was brought to the cabinet and an LoS was issued on March 14, 2013, with Goldman Sachs as the lead arranger for the US$3 billion issuance. Funds raised were diverted from the original intention of developing the Tun Razak Exchange. The debt on the bond is due in 2023.
Irwan also testified that, ultimately, his ministry was forced to come up with an LoS, which effectively read like a government guarantee, as Goldman Sachs had insisted on the terms of the LoS to ensure that the debt paper would be easily marketable.
He agreed with Wan Aizuddin that this was the normal process in the preparation of a memo or LoS but conceded that the speed or urgency required from the ministry on the matter was the fastest he had experienced, even describing it as “extraordinary”.
Even so, he insisted that no shortcuts were taken as the MoF had evaluated the request.
“I mean, if you look from the perspective of the MoF, it was the 1MDB officials. When they came, they said they were directed by the [then] PM and so on ... As to how far was their connection with the [then] PM [to hasten the process], I don’t know.”
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