Ex-1MDB CEO says Jho Low’s name kept under wraps to protect Najib, denies plot for kickbacks from Goldman Sachs

KUALA LUMPUR : The involvement of businessman Low Taek Jho — who was said to be an adviser to former prime minister Datuk Seri Najib Razak — in 1Malaysia Development Berhad (1MDB) affairs was kept off the radar in order to protect the then prime minister, the court heard yesterday.

1MDB former CEO Datuk Shahrol Azral Ibrahim Halmi, who was testifying as the ninth prosecution witness in Najib’s power abuse and money-laundering trial, confirmed that Low was actually involved in 1MDB’s 2012 plans to acquire power plant operator Tanjong Energy Holdings Sdn Bhd for RM10.6 billion.

While confirming that Low was the one who had proposed investment bank Goldman Sachs to act as the financial adviser for 1MDB’s RM10.6 billion bid, Shahrol denied omitting Low’s name in 1MDB board minutes as a means to receive kickbacks from Goldman Sachs if the deal went through.

In February 2012, Goldman Sachs was appointed to be financial adviser to 1MDB for the deal, with lucrative fees to be paid to Goldman Sachs in the form of 0.5 per cent of the bid price if the acquisition succeeds

Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court July 15, 2020. — Picture by Ahmad Zamzahuri
Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court July 15, 2020. — Picture by Ahmad Zamzahuri

Documents shown in court today showed that Shahrol had on February 7, 2012 indicated his acknowledgment on an appointment letter for Goldman Sachs to act as 1MDB’s financial adviser for the Tanjong Energy acquisition bid, a day before the 1MDB board meeting where they were informed of this and subsequently gave their approval.

Today, Najib’s defence lawyer Wan Aizuddin Wan Mohammed quizzed Shahrol regarding Low’s role in having Goldman Sachs appointed in February 2012 as the financial adviser for the acquisition bid.

Asked if Low had proposed for Goldman Sachs to be bookrunner, underwriter and arranger for 1MDB’s funding process for the acquisition on top of being its financial adviser, Shahrol indicated this to be the case.

“If I recall, Jho Low basically told me why don’t we get Goldman to do everything relating to the funding,” Shahrol replied.

Asked if Low had behaved like a broker for Goldman Sachs by proposing it to be 1MDB’s financial adviser, Shahrol said he did not hold this view then.

“No, I didn’t see it at that time, I see it more that he was in touch with all key stakeholders including Datuk Seri Najib, and Goldman has always been in the picture as far as TIA (Terengganu Investment Authority) and 1MDB was concerned, so I didn’t see Jho Low as a broker but more of a facilitator between all stakeholders,” Shahrol replied, alluding to Najib’s role as 1MDB shareholder on behalf of the Finance Ministry’s MOF Inc via his position as finance minister.

Agreeing that he had not informed the 1MDB board of directors during the February 8, 2012 meeting that Goldman Sachs’ appointment was at Low’s suggestion, Shahrol explained: “Because the convention at that time was to keep Jho Low’s name out of the board meeting.”

When asked why there was such a convention and why he had followed it, Shahrol said: “Because since the very beginning, Jho has informed me his involvement must be kept off the radar in order to protect Datuk Seri Najib.”

Wan Aizuddin however suggested “I put it to you that the reason why you have kept Jho Low’s name out from the knowledge of the board of directors was because you were colluding with him in order to secure this remuneration, in the event this acquisition is successfully undertaken by Goldman Sachs.”

Shahrol then disagreed to the suggestion.

Datuk Shahrol Azral Ibrahim Halmi is pictured at the Kuala Lumpur High Court July 15, 2020. — Picture by Ahmad Zamzahuri
Datuk Shahrol Azral Ibrahim Halmi is pictured at the Kuala Lumpur High Court July 15, 2020. — Picture by Ahmad Zamzahuri

Earlier, Wan Aizuddin had asked Shahrol about the February 7, 2012 appointment letter, where 1MDB agreed to pay Goldman Sachs a fee of 0.5 per cent of the Tanjong Energy acquisition price if the deal succeeds.

Asked who had suggested the 0.5 per cent for Goldman Sachs’ fees, Shahrol said this arose from negotiations involving Goldman Sachs’ official Tim Leissner and 1MDB officials Vincent Koh, Jasmine Loo, as well as with Low’s involvement in such talks.

Shahrol explained that he had told the 1MDB board that he had signed on 1MDB’s appointment letter of Goldman Sachs before the February 8, 2012 1MDB board meeting, in order for Goldman Sachs to attend the meeting and make presentations in the capacity as financial adviser.

Shahrol disagreed that Goldman Sachs representatives had in the meeting proposed the RM10.6 billion price for 1MDB’s proposed Tanjong Energy acquisition as he said the figure was based on presentations by other technical and tax advisers during the February 8, 2012 board meeting.

Wan Aizuddin suggested that the reason why Goldman Sachs had valued Tanjong Energy’s assets at RM10.6 billion was because Goldman Sachs’ fee would be higher if it overvalued the asset, but Shahrol said: “I have no comment on that, I don’t know why Goldman Sachs valued at RM10.6 billion other than the fact it was based on valuation of other technical and tax advisers.”

Shahrol agreed that the fees that Goldman Sachs would receive from 1MDB would hinge on how much 1MDB offered to buy Tanjong Energy, saying: “I agree the higher the purchase price, the higher their fees would be.”

Wan Aizuddin: This might be a bit controversial, I put it to you that you had colluded with Goldman Sachs in regards to pricing of the bid price, so Goldman Sachs would receive high fees and you would receive kickbacks in return from Goldman Sachs.

Shahrol: Absolutely disagree.

Shahrol further disagreed that the purported kickback scheme was why he had approved 1MDB’s engagement of Goldman Sachs before receiving the 1MDB board’s approval for the appointment.

The trial before High Court judge Collin Lawrence Sequerah resumes this afternoon.

The High Court rejected Datuk Seri Najib Razak’s application to have the former prime minister’s 1Malaysia Development Berhad (1MDB) trial end earlier tomorrow for the latter to attend Parliament to deliver a speech.

High Court judge Collin Lawrence Sequerah acknowledged Najib’s duties as a member of Parliament for the Pekan constituency, but decided that the 1MDB trial would proceed for the full day today as previously schedulednull

“I appreciate he has a duty to perform, but I also have a duty to perform,” the judge said, noting that these were competing duties.

“This case has to proceed tomorrow July 16, until 4.30pm with the usual lunch break,” the judge said.


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