April 11, 2016
Guess who is running 1MDB
by Sarawak Report
The facts published by Malaysia’s Public Accounts Committee have proved that the constant denials issued by Jho Low, Najib Razak, Shahrol Halmi and their friends at PetroSaudi over the past few months about 1MDB were repeated lies.
For example, Low has officially claimed that he had no involvement in 1MDB beyond May 2009, when he allegedly stepped down from his post as Najib’s official ‘Advisor’ to the fund.
In the same vein, Najib Razak has claimed he performed a distant ‘advisory role’.So, setting aside all the evidence of the emails from the PetroSaudi database, published by Sarawak Report, which PetroSaudi have libellously accused us of “tampering”, we now have the official report of the supreme Parliamentary authority on the matter.
The PAC report has confirmed that Najib was the sole shareholder and signatory for the fund – and now for the first time Sarawak Report is able to publish the actual documents to show the proof. These company records show that from start to finish, Najib was signing off on resolutions, which the Prime Minister plainly knew were riddled with lies.
Government to Government with ‘KSA’
Take, for example, the on-going fiction that the PetroSaudi deal was a ‘government to government’ joint venture with the Kingdom of Saudi Arabia. Najib was still signing documents alluding to this bogus claim as late as 2011, when he sent off yet another whopping sum of US$125 million, borrowed by 1MDB, supposedly again to PetroSaudi.
The fact that PetroSaudi had nothing to do with the Kingdom of Saudi Arabia and was merely a small private company, in which the King’s seventh son had a 50% share, was plainly known to Najib, since the beneficial owners had to be declared to the banks (we have already shown the documents).
We also have emails from shareholder Tarek Obaid’s brother warning that PetroSaudi must tone down Najib’s proposed press release at the launch of the joint venture, to make sure 1MDB did not mislead the international press with claims of a ‘government to government’ venture.
Najib wanted to give a false impression that the company was an official organ of the state and was involved in minute detail in the drafting of the public announcements, according to this evidence:
Ironically, PetroSaudi has been threatening to sue journalists for suggesting that Prince Turki was even a shareholder of the company (which he exited later in 2014). Surely it ought to be suing Najib for claiming it was owned by the Kingdom of Saudi Arabia and indeed King Abdullah himself?
Jho Low phoned Najib during Board meeting to overrule 1MDB Chair
Meanwhile, in September 2009, Jho Low, far from having quit, was attending board meetings of the fund and calling the shots, most particularly at the crucial meeting of September 26, just two days before Najib and the executives from PetroSaudi signed their joint venture deal.
Sarawak Report has learnt that the former Chairman, Bakke Mohd Salleh (also Chief Executive, Sime Darby) was particularly vocal and tough at this meeting, insisting that proper checks should be made before a billion dollars were hastily invested in a company, which the Board had not heard of until a week before.
In response, we have been reliably informed, Jho Low dialled up the PM on his handphone, which he then passed to board members, in order to be informed ‘from the top’ that the deal was authorised to proceed! So, who do we conclude was running the show?
The result was a reluctant concession by the 1MDB board that the joint venture with PetroSaudi should be approved, but only subject to conditions, such as a proper and independent valuation of the company.
CEO Shahrol Halmi simply ignored those conditions and sent off the money anyway (mostly to a third party company, Good Star Limited, owned by Jho Low). His excuse? Section 117 of the articles of the company meant that the real boss was Najib, so it was Najib whom he chose to obey!
Converting PetroSaudi JV to a ‘Muharaba loan deal’
Other documents accessed by Sarawak Report show how Najib signed off on later major decisions. This included changing the relationship with PetroSaudi from a joint venture to a ‘Muharaba loan’ arrangement just six months later:
The details of the Joint venture (and payment to Good Star) were left out of the Audit through this accounting device. The point of this ‘sale share agreement’, say accountancy experts, was to hide the details of the joint venture (and the payment to Good Star) by superseding the arrangement – the manoeuvre was conducted just days before the end of the financial year.
Even so, auditors Ernst & Young were not happy with the information that they had been passed by 1MDB it has emerged. The Hansard notes of the PAC meetings and PAC report make clear the frictions – the auditors having demanded to see the financial statements of the joint venture company from September 2009 and also documentary proof of the value of the assets of PetroSaudi, before agreeing to sign off on the 2009/10 accounts.
1MDB failed to produce these basic documents and, instead, the records show that Najib signed off on a resolution to sack these pesky and demanding accountants, who were wanting proof about the value of the PetroSaudi deal:
Who had signed off on this ‘investment’? Najib, of course:
As the driver of all these decisions, through a series of changing CEOs and accountants, it is simply not acceptable for him to attempt to blame anybody else or expect anybody else to account for the money.
In late 2014 an attempt was made to imply that this so-called US$2.23 billion had been ‘redeemed’ and returned as ‘cash’ to BSI Bank in Singapore, into an account managed by Jho Low’s personal relationship manager Yak Chee Yiew. By March 2015 this ruse had been exposed as a lie, because the Singapore authorities had determined that there was no actual money in the account.
Yak was sacked and he has now been followed into ‘retirement’ by his boss at the bank, Hanspeter Brunner. The so-called Brazen Sky account in question has been frozen and is under investigation.
In fact, the whole world of global financial regulators is now avidly investigating 1MDB and tracing the money trail of the missing billions, while Najib persists in alleging that first nothing went wrong at 1MDB; second that no money has gone missing and third that if something did perhaps go wrong it was owing to 1MDB executives, or Board Members or perhaps those Finance Department officials whom he had banned from being involved in the company.
Power without accountability appears to be Najib’s favourite motto when it comes to 1MDB. – SARAWAK REPORT