In court, 1MDB ex-CEO says afraid to tell MACC ‘the truth’ in 2015 probe as Najib PM then

KUALA LUMPUR : A former CEO of 1Malaysia Development Berhad (1MDB) today said he had not dared to share the “truth” about the government-owned company with anti-corruption investigators in 2015 as Datuk Seri Najib Razak was the prime minister then.

Mohd Hazem Abd Rahman said this while testifying as the 10th prosecution witness in Najib’s corruption trial over more than RM2 billion of 1MDB funds.

Hazem said June 10, 2015 was the first time he had given his statement to the Malaysian Anti-Corruption Commission (MACC), with this statement recorded while he was still a 1MDB director and only regarding 1MDB’s real estate matters, particularly a purchase by Tabung Haji of one of the plots of land in the Tun Razak Exchange Development (TRX).

Cross-examined by Najib’s lead defence lawyer Tan Sri Muhammad Shafee Abdullah, Hazem confirmed that the MACC statement recorded from him was not about the 1MDB scandal itself, before further stating that he did not dare to talk about the 1MDB matter itself to the investigators.

Datuk Seri Najib Razak arrives at the Kuala Lumpur High Court February 15, 2021. — Picture by Shafwan Zaidon
Datuk Seri Najib Razak arrives at the Kuala Lumpur High Court February 15, 2021. — Picture by Shafwan Zaidon

Shafee: Didn’t it occur to you, this is a splendid time for you to tell them that you have been uncomfortable about what happened in 1MDB?

Hazem: Not really.

Shafee: Still didn’t want to say anything despite your soul being troubled.

Hazem: I’m fearful to tell the whole truth then, because the prime minister is still in power.

Shafee: You agree with me that if you had wanted to tell, this was an opportunity but you chose not to tell?

Hazem: Correct.

Hazem said however that he did air his concerns and frustrations about 1MDB affairs to the company’s chairman Tan Sri Lodin Wok Kamaruddin and two company officials, Vincent Koh and Azmi Tahir who were employed during his tenure, claiming that they had also shared the same frustrations as him on how the company was being run.

Hazem said the next time that MACC recorded a statement from him was in 2018 after the 14th general elections. All in, he said the MACC recorded statements from him a number of times.

Former 1Malaysia Development Bhd (1MDB) chief executive officer Mohd Hazem Abdul Rahman arrives at the Kuala Lumpur Court Complex February 15, 2021. — Picture by Shafwan Zaidon
Former 1Malaysia Development Bhd (1MDB) chief executive officer Mohd Hazem Abdul Rahman arrives at the Kuala Lumpur Court Complex February 15, 2021. — Picture by Shafwan Zaidon

Hazem joined 1MDB as chief operating officer (COO) in August 2012 and was its CEO from March 2013 until early January 2015.

Today, Hazem agreed that he was told by Low Taek Jho in a July 2012 meeting that 1MDB was meant to benefit Umno. He added that he was briefed on this by Low before he took up the COO position in 1MDB.

Agreeing that it would be “wrong” and “criminal” for 1MDB as a government-owned company to benefit Umno, Hazem however said that he did not dare to turn down the appointment as 1MDB COO.

Shafee: Before you took the contract, you knew this is wrong. So you went into 1MDB, took up the contract, with your eyes wide open?

Hazem: Yes.

Shafee: You are going to be a participant of a criminal act.

Hazem: Yeah.

Shafee: You were OK with that?

Hazem: You know, at that time, I was fearful of basically snubbing the prime minister, because I heard my CV has been minuted.

Hazem had said previously in his witness statement that he was reluctant to join 1MDB after hearing Low’s July 2012 briefing that the company was to help Umno and was under Najib’s control, as there was too much political decisions he would have to follow if he were to work there.

Hazem had however also said in his witness statement that he had no other choice as Najib had already signed and approved his appointment as COO and executive director in 1MDB, and as he felt he should not reject the job as he was told by 1MDB director Tan Sri Ismee Ismail that Najib had already made the final decision and agreed with his appointment.

Hazem however also confirmed to Shafee today that he had not seen evidence of benefit or money being sent to either Umno or Najib while he was CEO at 1MDB for around two years.

Under questioning earlier today, Hazem agreed that Low’s briefing of government-owned 1MDB’s funds being for Umno’s benefit was an “insane” idea, pointing out the presence of Najib’s then principal private secretary Datuk Azlin Alias at the same meeting as the reason why he had believed Low regarding 1MDB’s purpose.

Shafee then asked him why Umno or Najib should benefit from 1MDB when the political party had “nothing to do with” the company, arguing that this would be a criminal act if money was siphoned out from 1MDB for such purposes.

Hazem confirmed he had not highlighted to the 1MDB board regarding Low’s instructions that Umno would benefit from 1MDB’s investments, but said he had raised this issue multiple times privately with Azlin as well as Lodin. He claimed Lodin shared his concerns.

Hazem agreed that he had presumed that the 1MDB board was working towards Umno’s interests and that he had held the view even after he left the company based on news reports about the matter.

Shafee: Although you now admit that to benefit Umno like that is totally criminal?

Hazem: Yes.

Shafee questioned Hazem’s January 2015 resignation by asking if he was not fearful of snubbing the prime minister then.

Hazem replied he did not want to be involved, saying: “At that time I had hit the limit, where I think I had to go.”

Shafee’s next questions focused on events after Tan Sri Mohd Bakke Salleh resigned as 1MDB chairman in 2009, which Hazem said was due to disagreements with 1MDB’s Petrosaudi deals.

Shafee suggested that Bakke’s resignation did not indicate Najib to be a vengeful person.

Shafee: You would have seen an example whether Datuk Seri Najib is a person full of vengeance—you resign, he comes and bullies you, haunt you and harass you. Tan Sri Bakke—he resigned and got promoted, he was doing very well even in Datuk Seri Najib’s time. He resigned twice, nothing happened.

Hazem: That’s Tan Sri Bakke. I don’t think I’m in the same capacity as Tan Sri Bakke.

Shafee suggested that Bakke was not dropped from positions in government-linked companies after resigning from 1MDB, but Hazem said he became unemployed after resigning from 1MDB as CEO.

Shafee argued that Hazem’s unemployment after 1MDB had nothing to do with any former or current prime ministers, and accused Hazem of being dishonest in claiming to be afraid of Najib.

Shafee: I’m saying that’s not correct, that’s not an honest opinion, not an honest view to have taken that you were so terrified of the prime minister, and therefore you tolerated for two years in a criminal way in 1MDB, I’m saying that’s not being truthful.

Hazem: That was my opinion then.

Shafee then suggested that the only way anybody could tolerate the criminal activities in 1MDB for over two years was if he was part of it and put it to Hazem that he received benefits.

Hazem disagreed, though he confirmed that he received a bonus of more than RM2.7 million when he resigned from 1MDB in 2015.

Shafee: Now doesn’t that strike you almost as a comedy, 1MDB is a comedy of errors, but you going out with your statement that for two years at least, you willingly did all these criminal things as instructed, isn’t it a further comedy that for all that you did, you were rewarded with RM2.7 million?

Hazem: Yes.

Hazem had previously said that he and others in 1MDB had viewed Low’s instructions on the company as coming from the prime minister himself, and that he would not have been able to resist following the instructions despite having raised disagreements on such matters to Low.

Jho Low was said to have relayed instructions as though coming from the prime minister himself. — Picture via Facebook
Jho Low was said to have relayed instructions as though coming from the prime minister himself. — Picture via Facebook

Earlier, Shafee asked if in hindsight, Hazem would have done things differently in 1MDB if he was given a chance to redo them.

Hazem said: “I would say I would rather not even be part of 1MDB, I would quit because I don’t think anybody in 1MDB then would be brave enough to do what you said.”

Shafee then suggested that Low was the “culprit” to blame for the 1MDB trouble, but Hazem pointed to the 1MDB board as well as shareholder which would be represented by Najib as the finance minister.

“It depends, at the end of the day, whatever plan that requires approval when it reaches the board and shareholder, has always been approved,” the prosecution witness said.

Hazem agreed that the blame for 1MDB’s losses of billions of ringgit could partly be attributed directly to Low, further agreeing that the 1MDB board had failed in terms of matters that it ought to decide on if viewed in terms of corporate governance “traditionally”.

“The only difference is that this is helmed—the board reports specifically to the prime minister directly,” Hazem said, adding that all approvals on 1MDB matters required the prime minister’s approval.

Hazem later agreed that the 1MDB board was actually not functioning as many major financial decisions were not decided via board meetings but by directors’ circular resolutions, and that the board of advisers was also not functioning as it was not asked for advice by the management and board of directors, and that Najib could have been invited to attend 1MDB board meetings but that there was no such invitations.

Najib was then also chairman of the board of advisers, while also wearing multiple hats, including signing off as 1MDB shareholder on the company’s matters in his role as finance minister then.

While agreeing that Najib as the prime minister would have expected the 1MDB board and management to be performing and carrying out their duties, Hazem however disagreed that Najib would have no idea about issues in 1MDB as there were news reports in 2013 and 2014 regarding the company and that Najib as the prime minister could “call to get clarification or even to investigate”.

Shafee then suggested that then prime minister Najib in any of his capacities was “mostly kept in the dark and in fact misled by 1MDB management and board apart from Jho Low who was playing the prominent role of hoodwinking the prime minister as well as 1MDB itself”, but Hazem disagreed.

Najib’s 1MDB trial before High Court judge Collin Lawrence Sequerah resumes tomorrow morning.


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