KUALA LUMPUR (Nov 16): Nearly US$3 billion from 1Malaysia Development Bhd (1MDB) funds was transferred out to other accounts instead of its intended purpose of funding a joint venture, and this was believed to have been sanctioned by former premier Datuk Seri Najib Razak, the High Court heard on Tuesday.

This included US$100 million that was deposited into the account of Kelab Kebajikan 1Malaysia Pulau Pinang and US$105 million which was deposited into the account of Yayasan Rakyat 1Malaysia, said former 1MDB chief financial officer Azmi Tahir.

The US$3 billion was money raised from bonds issued by 1MDB's subsidiary, 1MDB Global Investment Ltd (1MDB GIL), for a 50:50 joint venture between 1MDB and Aabar Investments PJS, to develop the Tun Razak Exchange, or TRX, in Kuala Lumpur in a government-to-government agreement with Abu Dhabi.

However, it is now known that 1MDB was actually dealing with a sham company which shared the same name as the real Aabar in Abu Dhabi.

On March 19, 2013, a sum of US$2.721 billion — the balance of the US$3 billion raised after paying off Goldman Sachs's fees in the bond issuance — was sent into 1MDB GIL's account with BSI Bank at Lugano in Switzerland, where US$1.59 billion was later transferred out to three investment funds, namely Cistenique Investment Fund, Devonshire Funds and Enterprise Emerging Markets Fund.

Azmi, who was detailing these transactions at the 1MDB-Tanore trial, said the 1MDB GIL account had been drained of US$2.8 billion by September 2013 after 14 transactions or money transfers were completed.

“For the US$100 million transfer to Kelab Kebajikan 1Malaysia Pulau Pinang between the period of March 25 to April 29, 2013, the reason this money was transferred to the club was for donation purposes on orders relayed by [Najib's principal private secretary] Datuk Azlin Alias to me. I believed this to be Najib’s orders,” he said.

He also said the same thing of US$105 million being transferred from 1MDB GIL to Yayasan Rakyat 1Malaysia between March 25 to May 2, 2013.

“The money was transferred to Yayasan Rakyat 1Malaysia on the instructions of Azlin, which I believe to be on instructions directly from Najib. Besides that, Datuk Seri Najib was a trustee of this foundation,” he said.

However, Najib’s lawyers objected to these statements from Azmi, citing hearsay.

Najib is facing four charges of abuse of power to enrich himself with RM2.3 billion from 1MDB, and 21 counts of money laundering involving the same amount. He faces up to 20 years' imprisonment if convicted.

The hearing before judge Datuk Collin Lawrence Sequerah continues.

Read also:
Ex-1MDB CFO: Jho Low instructed Najib 'not to talk too much' at 1MDB meeting with auditors

The Edge is covering the trial live here.

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