This article first appeared in The Edge Financial Daily on October 1, 2019

KUALA LUMPUR: Former 1Malaysia Development Bhd (1MDB) chief executive officer Datuk Shahrol Azral Ibrahim Halmi told the High Court here yesterday that he was unaware that Aabar Investments PJS Ltd (Aabar BVI), which 1MDB paid US$576.94 million to as a security deposit for a corporate guarantee, was not a subsidiary of International Petroleum International Company (IPIC).

Aabar BVI was in fact a company incorporated by Low Taek Jho (Jho Low) and his associates in the British Virgin Islands (BVI).

During the examination-in-chief yesterday, Shahrol said he thought he had signed an agreement with the real Aabar, because the names of the companies were similar. He later realised the difference between the real Aabar and Aabar BVI when it made the news.

Take note that the real subsidiary of IPIC is Aabar Investments PJS, without the “Ltd”.

The amount of US$576.94 million was paid to Aabar BVI. The prosecution’s ninth witness was unsure which party had decided on the security cost of US$576.94 million paid to the fake Aabar.

When Senior Deputy Public Prosecutor Datuk Seri Gopal Sri Ram asked why he did not have any suspicions of the transaction, Shahrol said it appeared a legitimate government-to-government (G2G) initiative.

“I had absolutely no suspicions primarily because this was a G2G initiative, as evidenced by the IPIC guarantee. Also, this particular transaction falls completely under Article 117 of 1MDB’s memorandum and articles of association as it involves national policy as well as strategic implications for the country,” he said.

“Therefore, when Jho Low and Jasmine [Loo] put all these transactions or requirements for the guarantee, I accepted [them] at face value,” Shahrol added.

Further, the witness clarified there was a sense of urgency in the business dealings, making it more difficult for the transaction to be scrutinised.

“The speed element has always been there. We had [trusted] each of the working parties to do their bit and to do so in the best interest of the country and the company. So, had we been given more time, there would probably have been questions raised about the peculiar names of the companies,” he explained, adding it was Jho Low who underscored the urgency, so the Abu Dhabi hosts did not change their minds.

Shahrol went on to highlight the transaction was approved by then finance minister Datuk Seri Najib Razak, only three days after a letter was sent to the finance ministry by 1MDB. This, according to him, underscored the urgency by Najib himself as well.

The witness, in his testimony, emphasised again that he did not know the US$576.94 million paid to the fake Aabar was meant to be abused.

“It [was] made via good faith, based on documents prepared by Jasmine Loo, Terence Geh and Goldman Sachs’ Tim Leissner. I would not have approved the remittance [had I known] that it would be abused.

“Following investigations, now I know the security deposit was arranged by Jho Low for 1MDB’s money to enter into the account, which is controlled by him, for the purpose that the funds are abused,” he said.

Loo was 1MDB’s legal officer, while Geh was 1MDB’s deputy financial officer. Both are missing, believed to be not in the country.