This article first appeared in The Edge Malaysia Weekly on March 1, 2021 - March 7, 2021

SUCH was financier Low Taek Jho’s control of state-owned 1Malaysia Development Bhd (1MDB) that none of its well-paid board of directors or successive CEOs questioned his orders, even when they knew what he was asking of them was criminal.

Given such deference and compliance, Low was given free rein to manipulate and control every aspect of the so-called strategic investment company while ensuring that his name did not show up in any official capacity. Or as former 1MDB CEO Mohd Hazem Abdul Rahman put it, “In the eyes of 1MDB, Jho Low did not exist.”

Hazem, who was CEO of the company from 2013 to 2015, told the High Court that this was the “modus operandi” of the company and that he was told even before he joined that Low’s name should never be mentioned. “Everyone was aware and understood that on record, his name was never to be mentioned. It was well understood,” he said.

Even the Cabinet, which approved funding and letters of support for 1MDB as per Low’s wishes, had not heard any mention of his name. This was revealed by former deputy chief secretary to the Cabinet Tan Sri Mazidah Abdul Majid, the 11th prosecution witness in former premier Datuk Seri Najib Razak’s 1MDB-Tanore trial.

She said Low’s name was never mentioned in the meeting minutes of the Cabinet and the memoranda related to 1MDB brought forth by Najib, who was also finance minister at the time.

The 10th prosecution witness, Hazem indicated that as CEO, he was afraid to tell the truth about the inner workings of 1MDB to the board of directors even though he was aware that there was criminal wrongdoing. He believed that Low’s instructions to him came directly from Najib, who was chairman of 1MDB’s board of advisers.

Hazem also revealed that he did not want to snub 1MDB when it came calling for him to be its chief operating officer in 2012 as he was fearful of Najib.

Tan Sri Muhammad Shafee Abdullah: You were going to be a part of criminal acts. You are okay with that?

Hazem: I was fearful at the time of basically snubbing the prime minister because I had heard that my CV had been minuted [by Najib].

Hazem also said that despite knowing all of the wrongdoings, he never called for a board meeting to clarify instructions from Low.

Questioned on the lack of board meetings, Hazem said, “This was not the way it was done in 1MDB”, but insisted he had shared his frustrations off the record with his friend and company chief financial officer Azmi Tahir, chairman of the board Tan Sri Lodin Wok Kamaruddin and director Tan Sri Ismee Ismail.

“These issues were not meant to be brought to the board,” he added.

Equal to Hazem’s inaction was that of the board of directors. It was revealed that many instructions that had come from Low were approved by the board via directors’ circular resolutions (DCRs), which Jasmine Loo — 1MDB general counsel and a close associate of Low — had pushed them to sign off on.

DCRs are a mechanism that allows directors of a company to pass a resolution without a meeting of directors. These are commonly used for non-contentious and routine resolutions that need to be passed between board meetings.

However, Hazem said the board at 1MDB had passed DCRs for major decisions and big projects without holding meetings because they were instructed to do so by Najib via Low.

The dereliction of duty by the board and Hazem prompted Shafee, the lead defence lawyer, to observe that the board members had “played dead” and “might as well be dead” because they had signed off blindly on crucial documents without question.

When asked by Shafee if they had sought clarification from the board of advisers on any matter, Hazem said the board of directors did not need to do so as Najib was on the board and it was understood that Najib was giving the instructions.

It was revealed in court that the directors were each paid RM130,000 per annum while the chairman of the board took home RM150,000.

Startlingly, Hazem and the board also took instructions from Loo and Terence Geh — 1MDB’s director of investments and another associate of Low — even though they were subordinates in the company because “they were people of Jho Low”.

Najib faces four counts of abuse of power and 21 counts of money laundering in relation to RM2.28 billion of 1MDB funds.

The hearing before judge Collin Lawrence Sequerah will resume in May.

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