This article first appeared in The Edge Financial Daily on September 26, 2019

KUALA LUMPUR: Former prime minister Datuk Seri Najib Razak did not explain why the joint-venture (JV) agreement between 1Malaysia Development Bhd (1MDB) and PetroSaudi International Ltd (PSI), which was to be signed by himself and King Abdullah of Saudi Arabia, did not materialise, according to former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi yesterday.

Senior deputy public prosecutor (DPP) Datuk Seri Gopal Sri Ram asked the witness to confirm that the JV was to be done by the two governments, to which he said yes.

Shahrol also confirmed that Najib was to sign the agreement on behalf of the Malaysian government, and King Abdullah on behalf of the Saudi government.

“Did that happen?” asked the senior DPP.

“No,” replied Shahrol.

“Did the accused at any time inform the board of directors, as the chairman of the board of advisers, why this did not happen?” asked Sri Ram.

“No,” said the witness.

“Did the accused, during the period between the meetings on Sept 18 and 26, call you and ask you, being the managing director of the board, to verify the bona fide [status] of this PetroSaudi company?” said Sri Ram.

“No,” said Shahrol.

The JV agreement, drafted by 1MDB lawyers from Wong and Partners, Jho Low and Casey Tang Keng Chee, was signed on Sept 28, 2009.

Shahrol said he had signed the agreement, given that there was a directive from Najib, and believed that it was for national interests.

The former premier earlier urged 1MDB’s board of directors to expedite its decision on the JV.

The witness recalled a special 1MDB board meeting on Sept 26, 2009, attended by the directors of the company, as well as Casey Tang, the executive director of business development, and fugitive businessman Low Taek Jho — better known as Jho Low — during which he passed his telephone to then 1MDB chairman Tan Sri Mohd Bakke Salleh.

“Tan Sri Bakke covered a part of Jho Low’s phone with his hand and whispered ‘PM’ to us. I understood that it meant that Datuk Seri Najib wanted to speak to him. I saw Tan Sri Bakke getting up to answer the phone in the meeting room,” said the witness.

Following the telephone call, Mohd Bakke informed the board that the JV with PSI was at the highest level between Malaysia and Saudi Arabia, with Najib asking for the decision on the JV to be made urgently, ahead of a visit by the Saudi royal family.

The agreement was supposed to be inked by both parties during the visit scheduled for Sept 28, 2009, said Shahrol.

He said Najib’s telephone call to Mohd Bakke was made because the latter, along with 1MDB director Tan Sri Azlan Mohd Zainol, seemed not convinced of the investment, following the presentation of the papers related to the JV with PSI.

“They were not convinced of whether the investment was really to be done with a company owned by the government of Saudi Arabia. They also questioned the 60:40 JV breakdown, whereby 60% of the JV was accounted for by PSI’s oil assets.

“The board of directors wanted to understand the assets better either via an independent valuation or a site visit,” said Shahrol, adding that Mohd Bakke had wanted a representative from PSI to present the JV to the board of directors.