KUALA LUMPUR (June 7): Former second finance minister Datuk Seri Ahmad Husni Hanadzlah testified on Tuesday (June 7) that he had informed ex-premier Datuk Seri Najib Razak that 1Malaysia Development Bhd (1MDB) should not invest in the joint venture with PetroSaudi International Ltd as the latter was still in the exploration stage.
Reading from his witness statement in the 1MDB-Tanore trial, he said he told Najib towards the end of 2009 that PetroSaudi was still exploring for oil at the time.
“If oil is not found, the investment will be hangus (burned),” he said, adding that such a venture should be passed to national oil company Petroliam Nasional Bhd (Petronas) instead.
However, Ahmad Husni said Najib told him to not get involved or interfere in 1MDB matters.
Deputy public prosecutor Deepa Nair asked the witness how he felt after hearing Najib’s response.
“I was calm but I was worried about 1MDB’s future because there was no feasibility study. That was the standard procedure. [The company] had no experience in petroleum or excavation.
“If no oil was found, then it would be a loss. That was what was worrying me,” Ahmad Husni told the High Court.
As he was told to stay out of 1MDB matters, Ahmad Husni said subsequent issues relating to the fund were not brought to his attention.
He added that whenever a 1MDB-related matter was brought to the Cabinet, he would abstain from the decision-making process and would not voice his opinion.
During his testimony, he also said there were no companies under the Ministry of Finance that had a board of advisors (BoA) in its company structure, except for 1MDB, nor were there any other companies that were under the Prime Minister’s Department’s supervision.
Ahmad Husni said he was not told why 1MDB had to be supervised by the Prime Minister’s Office.
In August 2010, he wrote a private letter to Najib expressing his view that the concerns relating to 1MDB will invite controversy and could jeopardise the government and the prime minister.
However, he did not receive any response from Najib on the matter.
“As Minister of Finance II, I feel that I had carried out my responsibility to point out the issues in 1MDB,” he told the court.
He testified that in early 2015, Najib had called him in to assist in the issues relating to the debt-laden 1MDB, although Ahmad Husni had declined to take on the responsibility on grounds that he was never involved with the fund.
“At the time, I told Datuk Seri Najib that I did not agree to take on the task because I had never been involved in or reported on the affairs of 1MDB, and I asked for this task to be done by a Minister in the Prime Minister’s Department.
“However, Datuk Seri Najib still insisted that I do it. Later, I met with the then minister in the Prime Minister’s Department Datuk Seri Wahid Omar to ask him if he would take over, but he also declined,” said Ahmad Husni.
He, along with his then private secretary Imran Yassin Mohd Yusof, subsequently gathered information on 1MDB — including the financial reports for the years ending March 31, 2010 to 2014, to draft a rationalisation plan for the company.
The witness said he found out that 1MDB’s debts stood at RM48.57 billion as at May 20, 2015, while its assets stood at RM49.89 billion.
He proposed two options for the rationalisation of 1MDB: either the fund liquidates all of its productive and unproductive assets for a gain of RM3.3 billion, or it monetises all assets except for its 30% stake in Edra Energy, 40% stake in Tun Razak Exchange (TRX) and 40% stake in Bandar Malaysia.
The Cabinet opted for the second option, he said, and had approved it in 2015, although it would be up to 1MDB to execute the plan.
While he was Minister of Finance II, he did not know of the transaction of monies into Najib’s personal account, and only found out about it through a statement by the Malaysian Anti-Corruption Commission, which stated that RM2.6 billion had gone into Najib’s personal AmBank account.
He subsequently asked Najib about it, and the latter said it was a donation from the Saudi royal family.
As the RM2.6 billion controversy grew, Najib’s media officer had met with Ahmad Husni and gave him a statement that was to be published in the papers.
“I met with Datuk Seri Najib to find out the purpose of the statement that was to be published. I told Datuk Seri Najib that if the statement was to address the controversy relating to the RM2.6 billion, why not give me the transaction details.
“As I understood it, he had returned RM2 billion of the amount and had only used up RM600 million,” he said, noting that the RM600 million was used for corporate social responsibility purposes.
However, his proposal was not executed and he never received any further details on the RM2.6 billion.
Najib is charged with four counts of abuse of power in enriching himself with RM2.3 billion of 1MDB funds and 21 counts of money laundering of the same amount. He could face a fine and up to 20 years’ imprisonment if convicted.
The trial resumes before Justice Datuk Collin Lawrence Sequerah on Wednesday.
The Edge is covering the trial live here.
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