This article first appeared in The Edge Financial Daily on August 7, 2019

KUALA LUMPUR: Former second finance minister Datuk Seri Ahmad Husni Hanadzlah yesterday described former premier Datuk Seri Najib Razak as autocratic in his dealings with 1Malaysia Development Bhd (1MDB) and former 1MDB subsidiary SRC International Sdn Bhd.

Testifying at Najib’s SRC trial in the High Court, Ahmad Husni, 67, said matters concerning 1MDB and SRC were off limits to him, and that he only handled other companies under the Minister of Finance, Inc’s (MoF Inc) purview.

The ex-minister said he was treated like an office boy in matters concerning 1MDB and SRC.

Ahmad Husni, the second finance minister from 2009 to 2016, is the first prosecution witness from Najib’s own cabinet to testify against the former premier.

Najib is facing seven charges of money laundering and abuse of power over RM42 million allegedly siphoned from SRC into his personal bank accounts between December 2014 and February 2015.

Ahmad Husni said while there should not be any difference in the finance minister (held by Najib) and second finance minister’s tasks, Najib was solely in charge of matters concerning 1MDB, its precursor Terengganu Investment Authority and SRC.

Replying to Deputy Public Prosecutor (DPP) Muhammad Izzat Fauzan, Ahmad Husni said he had twice advised Najib against managing 1MDB and SRC.

He said he sent a letter to Najib as a last resort but it fell on deaf ears. At times, he felt his role was reduced to that of an “office boy” in matters concerning these two companies.

No feasibility study done for 1MDB

“In the formation of new companies, especially if it’s under the MoF Inc, there would be detailed feasibility studies done. The feasibility studies are to ensure there would be long-term planning. Let’s say for 10 years.

“However for 1MDB or SRC, there were no studies or cost benefit analysis done and it was set up without any consideration.

“I [had] asked Najib why [we] formed 1MDB, and said we cannot form 1MDB without a feasibility study. [However,] Najib said ‘I know what I am doing, we are going ahead’. From [the time of] TIA, I knew I was not involved in all this,” the witness said.

Ahmad Husni, also a former Umno treasurer, said he only knew about SRC’s application for a RM2 billion loan from the Retirement Fund Inc (KWAP) in 2011 was to be guaranteed by the government, when then minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop tabled the matter to the cabinet.

“I met and asked Najib the purpose of the loan. Najib replied that it is for the generation of electricity and for the government’s involvement in coal mining.

“I told him [to] let the private sector deal with coal mining and not let a GLC (government-linked company) manage it. However, Najib replied that the government’s involvement in the coal mining industry would help strengthen Malaysia’s electric supply,” Ahmad Husni said.

The ex-minister also testified that he advised Najib against having SRC investing in PetroSaudi International’s venture in the United Arab Emirates as SRC did not have the expertise in the oil and gas industry. He went on to suggest that Petronas undertake the investment instead.

However, he said Najib told him: “(Ahmad) Husni, from today onwards you don’t get involved, I don’t want you to interfere in 1MDB.”

Ahmad Husni testified of another instance — when he knew SRC received a RM4 billion loan from KWAP, but RM3 billion of that was frozen in Switzerland for alleged money laundering.

He also knew the investment in coal mining was only done in 2014, despite SRC getting the KWAP loan in 2011, and that it took place in Java, Indonesia.

“I wanted to travel to Java to observe the coal mining and asked SRC officials to prepare the meeting. But in the end, it did not materialise,” he said.

Similarly, Ahmad Husni said he wanted to meet the Swiss authorities to help unfreeze the money but was advised against it by Najib.

The amount in the Swiss account by then had risen to RM3 billion and the ex-minister said at the time, the ringgit was depreciating and Malaysia wanted to bring the money back.

“I feel it was not money laundering, and was prepared to convince the Swiss authorities that it is KWAP money. However, Najib did not agree to this,” Ahmad Husni said, adding that Najib did not give any reasons.

Husni says difficult to get SRC officials to meet him

Ahmad Husni testified that although senior officers of Bank Negara Malaysia and other GLCs had regularly met and briefed him on developments, it was however difficult to get SRC representatives to meet him.

“I do not get any documents regarding 1MDB or SRC. I only met SRC chief executive officer (Nik Faisal Ariff Kamil) once [since SRC’s formation], and even then he did not bring any documents. He (Nik Faisal) did not come after that,” Ahmad Husni said.

During his testimony, Ahmad Husni was shown several documents including a memo concerning 1MDB’s recommendation that SRC be put under the MoF Inc.

“This memo was supposed to be sent to the minister of finance II. Did you receive this memo?” asked Muhammad Izzat.

“No. I only saw this document for the first time when the MACC (Malaysian Anti-Corruption Commission) showed it to me,” said the ex-minister.

He was also showed minutes stating he supported the second RM2 billion loan to SRC before being asked about the circumstances leading to the making of the minutes.

“With matters relating to SRC, my duty was just to follow orders,” he said.

“Did you study this matter?” asked the DPP.

“How am I supposed to study the matter? There were no documents sent to me. Nik Faisal never showed up for meetings. I only had one meeting with him and he did not bring any documents. I never saw him again after that,” said Ahmad Husni.

Ahmad Husni was shown the document concerning the RM2 billion loan granted to SRC as well.

While the document bore Ahmad Husni’s signature, he said he “did not have a choice and was forced to sign [it]”.

He pointed out how differently things were done in SRC and 1MDB, not in line with how other MoF Inc companies operate.

“An officer brought the document and I signed it,” he said, adding there were no discussions before inking his signature.

Muhammad Shafee: Husni spoke almost like a gun being held to his head

After Muhammad Izzat finished his examination in chief of Ahmad Husni, Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah said he would need his client’s full instruction to confirm Ahmad Husni’s statements, given the official relationship between the finance minister (Najib) and second finance minister.

“I will need to take full instruction from my client. [The witness’] testimony is very much like an angry man against my client. I would like to know the true circumstances of what he said,” said Muhammad Shafee.

He pointed out how Ahmad Husni kept reiterating that he had no choice in signing memos and documents.

“He signs the documents and keeps saying ‘I’ve got no choice’, almost like a gun was being held to his head,” said the lawyer.

Muhammad Shafee then requested for the court to grant a day off for him to get his client’s full instruction. Justice Mohd Nazlan Mohd Ghazali allowed a day off, saying proceedings will continue tomorrow morning.