KUALA LUMPUR (Sept 5): Despite giving an explosive testimony in court via her witness statement into the inner workings of 1Malaysia Development Bhd (1MDB), specifically the company’s attempt at obtaining a US$3 billion (RM13.36 billion) government-backed loan, Datuk Siti Zauyah Mohd Desa, a former deputy secretary-general at the Ministry of Finance (MOF), could not answer or just “does not remember” when pressed on details of her written testimony.

Testifying as the prosecution’s 26th witness in the ongoing 1MDB-Tanore trial, Siti Zauyah was asked by former prime minister Datuk Seri Najib Razak’s lawyer Wan Aizuddin Wan Mohamed about assertions she made in her witness statement. 

She had previously said in her witness statement that Najib, who was minister of finance then, had signed off on a letter of support (LOS) for a purported US$6 billion strategic acquisition joint-venture (JV) fund between 1MDB and Aabar Investments PJS, ostensibly for the development of the Tun Razak Exchange in Kuala Lumpur.

Siti Zauyah said MOF Inc did not have any information to conduct due diligence on the JV, but the LOS was processed anyway on the instructions of Najib.

However, when asked about those instructions on Monday (Sept 5), Siti Zauyah said that she “did not know” and kept quiet until Wan Aizuddin pushed her for answers. 

Wan Aizuddin: How was this instruction given?

Siti Zauyah: I don't remember.

Wan Aizuddin: Was it formal or informal?

Siti Zauyah: I don't remember.

Wan Aizuddin: So, what is the basis of your statement? There must be a certain event or document which made you make this loaded statement.

This was followed by a long silence from her. Wan Aizuddin then asked her about the lack of due diligence before the LOS was signed off.

Deputy Public Prosecutor (DPP) Nadia Mohd Izhar interjected to explain that in Siti Zauyah’s witness statement, she (Siti Zauyah) testified that Najib instructed for the LOS to be issued, not for due diligence to not be conducted.

After that, Wan Aizuddin referred to the LOS for 1MDB’s US$3 billion bond issuance.

He referred to Siti Zauyah’s witness statement that MOF’s loans management, financial market and actuarial division (BPKA) received orders via a letter dated Jan 15, 2013.

After seeing the letter, which she specifically mentioned in her witness statement, Siti Zauyah said that she was “not sure” if that was the same letter. 

The letter stated that 1MDB will enter into a 50:50 JV with International Petroleum Investment Company (IPIC) and in order to get funds, the company needed a letter of comfort (LOC) from the government.

Wan Aizuddin: Do you agree with me that [with] this (LOC), the government or MOF is not bound?

Siti Zauyah: Your honour, I am not a legal person, so I can't answer that.

He referred to her witness statement where she stated that MOF's initial stance on the matter was just to issue an LOC with a moral responsibility (tanggungjawab moral) only, and not any government guarantee.

Wan Aizuddin: Whose stance was this within the MOF?

Siti Zauyah: [Former] Treasury secretary-general [Tan Sri Dr Mohd] Irwan Serigar [Abdullah].

Irwan agreed to issue a guarantee in the form of an LOC, as requested by Goldman Sachs, which had given the bank the mandate to raise US$3 billion for 1MDB.

However, in her witness statement, Siti Zauyah said that the LOC was not to Goldman’s satisfaction.

Through 1MDB, it (Goldman) sought to change the letter from an LOC to an LOS that was legally binding, as it (Goldman) feared the deal would be unbankable without a government undertaking and the loan would not be realised.

An LOS is an indirect guarantee, where the parent company would have to settle the debt obligation if the company failed to repay the loan. And if the holding company failed to do so, then the government would be held accountable for the loan.

Meanwhile, an LOC is just a form of support and in no way holds MOF Inc liable for 1MDB’s debts. 

Wan Aizuddin asked if this request was made in writing, to which the witness answered in the affirmative.

However, when he pointed out that the said letter was nowhere to be found. Siti Zauyah went silent again. 

Wan Aizuddin referred to a meeting held on Jan 30, 2013 between 1MDB, MOF and Goldman Sachs, where the investment bank had allegedly stated that the LOC has to have a government undertaking, otherwise it would not be bankable.

Wan Aizuddin: Was this meeting minuted?

Siti Zauyah: I don't remember.

Wan Aizuddin: Did you attend the meeting?

Siti Zauyah: I don't remember.

Wan Aizuddin: Is this whole [meeting] outside your recollection?

Siti Zauyah: I didn't say that.

Wan Aizuddin: Did you prepare this portion of your witness statement or did someone else prepare it?

Siti Zauyah: I don't remember...I don't recall if I was present in this meeting. I didn't meet with Goldman Sachs. I just remember instructions from [Irwan].

Wan Aizuddin: At any time during the issuance of this LOC, you didn't meet with [Goldman Sachs] or you don't recall meeting with them?

Siti Zauyah: I don't remember.

Wan Aizuddin then pointed out that in her witness statement, she said that 1MDB dealt directly with the Prime Minister's Office (PMO) to avoid questions from MOF. He put it to her that she has no proof to support that.

Siti Zauyah said she does not remember.

Wan Aizuddin: I put it to you that the PMO or Najib was not involved in the change of Letter of Comfort (LOC) to Letter of Support (LOS).

Siti Zauyah: I don't know.

This comes as no surprise, as Siti Zauyah had previously testified before judge Datuk Collin Lawrence Sequerah that she was neither involved in drafting her sworn witness testimony, nor aware of its content, although she had signed off the document. 

Najib is charged with four counts of abuse of power and 21 counts of money laundering of RM2.28 billion of 1MDB funds.

The Edge is covering the trial live here.

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