KUALA LUMPUR (March 17): Prosecution witness Tan Sri Ismee Ismail, former director of 1Malaysia Development Bhd (1MDB), told the court that he might have wrongly assumed that former prime minister Datuk Seri Najib Razak wanted to issue Islamic sukuk to raise RM5 billion in May 2009.

However, four months ago, in November last year, Ismee told the judge that Najib, who was also the finance minister, was pushing for the fundraising exercise despite the Sultan of Terengganu, Sultan Mizan Zainal Abidin, and the board members objecting to it.

The Islamic medium term notes (IMTN), which were led by AmInvestment Bank Bhd, were issued during the period when the federal government was in the midst of taking over from Terengganu Investment Authority (TIA) the investment fund, which was later renamed to 1MDB, after Sultan Mizan grew dissatisfied with the running of the fund.

The takeover of the investment by the Minister of Finance Inc was completed in July 2009.

Ismee was appointed as TIA director by the Sultan of Terengganu. He continued to sit on the board of 1MDB after the federal government assumed control of the investment fund.

During his cross-examination by Najib's lawyer Datuk Hariharan Tara Singh at the 1MDB-Tanore trial on Thursday (March 17), Ismee said he might have been wrong to assert in his witness statement that Najib had wanted the bond issuance to be executed, after Hariharan showed him a letter which stated that Najib had agreed to postpone the fundraising exercise pending due diligence.

Upon showing Ismee the letter, Hariharan then asked the witness if Najib had indeed wanted to proceed with the bond issuance.

Hariharan: In light of what I've just shown you, Najib agreed to withhold [the bond issuance]. Could I be correct to say that his reaction was that he didn't want this bond [issuance] to be continued? It appeared that Najib was not pushing for IMTN.

Ismee: Yes.

Hariharan: Would it be correct that you and Shahrol (ex-1MDB chief executive officer [CEO] Datuk Shahrol Azral Ibrahim Halmi) would have that opinion? Do you agree that what you and Shahrol perceived could be wrong?

Ismee: Maybe my anggapan (assumption) was wrong.

Ismee previously testified that Sultan Mizan had summoned Ismee and Shahrol, who was also the TIA CEO then, to Terengganu to have a meeting with him and Tengku Datuk Rahimah Sultan Mahmud.

During that meeting, according to Ismee, he was told to sign a director's resolution to suspend the IMTN issuance.

Ismee said that in his opinion, it was at the behest of Sultan Mizan to have TIA and the IMTN started and if the Sultan wanted to suspend it, there would not be an issue at all.

Sultan Mizan, Ismee and Shahrol then signed the resolution to suspend the IMTN. However, Shahrol told Ismee after the meeting with Sultan Mizan that the fundraising exercise could not be halted as instructions had already been given to AmBank, despite signing the resolution.

Ismee testified that upon his return from Terengganu after signing the resolution, Najib summoned Ismee and Shahrol to his residence in Langgak Duta to find out what had happened in their meeting with Sultan Mizan.

Ismee said after he explained what had happened, Najib asked both men: "Why did you sign it?"

"Najib also asked us why we did not seek an extension from His Highness to give us time to think," Ismee said.

"I wanted to tell Najib that these were the wishes of the King, so what could we have done?" he told the court then.

Ismee then added that from Najib's reaction and intonation at the meeting, it seemed that the then finance minister wanted to go ahead with the IMTN issuance.

Shahrol also testified that Najib had instructed him to push through the IMTN issuance despite having signed a resolution to suspend it.

"[Najib] said something along the line of 'You go ahead, I will talk to Tuanku'. I saw that as an order and a mandate from the prime minister and minister of finance to carry on with the IMTN because he was the minister that was responsible for the government guarantee," said Shahrol previously.

Najib is currently facing 25 counts of money laundering and abuse of power for alleged misappropriation of money in 1MDB.

He is on trial for four counts of abuse of power and 21 counts of money laundering involving RM2.28 billion of 1MDB's funds.

The Edge is covering the trial live here.

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