Ex-1MDB CEO cites Jho Low’s instructions on alleged ‘boss’ Najib over signing of US$3b fundraising agreements without full documents in hand

KUALA LUMPUR : Former 1Malaysia Development Berhad (1MDB) CEO Mohd Hazem Abd Rahman today (May 17) cited now-fugitive businessman Low Taek Jho and then prime minister Datuk Seri Najib Razak to justify his signing off in 2013 on agreements and other legal documents for a 1MDB subsidiary to take on a US$3 billion debt, without looking at the full agreements and with only the signing pages given to him then.

Mohd Hazem said this while testifying in court as the 10th prosecution witness in Najib’s power abuse and money laundering trial over more than RM2 billion of 1MDB funds.

Under cross-examination by Najib’s lawyer Wan Aizuddin Wan Mohammed, Mohd Hazem said he had no choice but to sign off on the documents relating to the US$3 billion fundraising exercise through a bond issued by 1MDB Global Investments Limited (1MDB GIL).

Former 1MDB chief executive officer Mohd Hazem Abdul Rahman arrives at the Kuala Lumpur High Court May 17, 2021. — Picture by Miera Zulyana
Former 1MDB chief executive officer Mohd Hazem Abdul Rahman arrives at the Kuala Lumpur High Court May 17, 2021. — Picture by Miera Zulyana

Quizzed over several agreements which he had signed in March 2013 when only given the signing page and without being shown the actual agreements, Mohd Hazem confirmed that he had repeatedly said that these documents were part of Low’s plan and were instructions from Najib who had approved the issuance of the US$3 billion bond by 1MDB GIL to raise funds.

Mohd Hazem agreed with Wan Aizuddin that he had in 2013 viewed Low’s plan to be a business plan and concurred that the purported instructions from Najib were based on what Low verbally told him.

On all such documents which he signed with only the signing page in hand, Mohd Hazem confirmed however that he had not asked Najib whether the instructions given by Low were in fact Najib’s directions.

When Wan Aizuddin said Mohd Hazem’s duty as 1MDB CEO was to act in the best interests of the company, the latter said that this was true based on company law but also indicated the role of Low and Najib who was the prime minister then.

“Well, during that time, basically the boss of 1MDB is the prime minister as far as I am concerned and my assumption is that all these were planned by Jho Low who is a representative of the prime minister,” Mohd Hazem replied, confirming however that he had fiduciary duties in both 1MDB and also 1MDB GIL as he was also a 1MDB GIL director.

Wan Aizuddin then suggested that Mohd Hazem was not in the position to choose between acting in the best interests of the company or following Low’s instructions, based on his duty under the law to the company.

But Mohd Hazem replied: “I think the choice then, not only me, either you follow those instructions or quit from working with 1MDB.” 

Mohd Hazem agreed that he would be held liable “to a certain extent” under the law over the contents of the US$3 billion-linked fundraising agreements in 2013 which he signed off without seeing the full agreements but only the signing page, but said he had taken that the relevant officers and the bond issuance’s arranger Goldman Sachs would have done their due diligence to ensure that there would not be illegality in the agreements’ terms.

Mohd Hazem disagreed that the fundraising exercise would not have been possible if he had not signed these documents, saying: “Not really, I mean, if I don’t sign it, somebody else would sign it.”

He also disagreed with Wan Aizuddin’s suggestion that the documents that he had signed — while given only the signing pages to look at — played a pivotal role in the US$3 billion fundraising.

Mohd Hazem agreed that he had harboured suspicion about Low’s actual intentions for the fundraising exercise.

Asked by Wan Aizuddin over his alleged non-action on his suspicions such as by checking with Najib, Mohd Hazem said: “As far as I’m concerned, this is basically managed by the prime minister, so I leave it at that, the whole management and board members know about this.” He was referring to the 1MDB management and 1MDB board of directors.

Wan Aizuddin: All this was told to you by Jho Low?

Mohd Hazem: Yes.

Wan Aizuddin: You never felt the need of doing secondary checks with the prime minister?

Mohd Hazem: I think there’s no point of secondary checks, it’s either you follow or you quit the job, even if I quit my job, they will get somebody else to do it.

Wan Aizuddin: I put it to you, you were wilfully blind, you knew exactly what was happening but you walked into it anyway, in all your conduct in signing only the signing pages, although you harboured suspicion that something was amiss from the very beginning.

Mohd Hazem: I disagree.

Former 1MDB CEO Mohd Hazem Abd Rahman is pictured at the Kuala Lumpur High Court January 6, 2021.  — Picture by Yusof Mat Isa
Former 1MDB CEO Mohd Hazem Abd Rahman is pictured at the Kuala Lumpur High Court January 6, 2021. — Picture by Yusof Mat Isa

Focusing on 1MDB Global Investments Limited’s (1MDB GIL) fundraising in March 2013 by taking on debts through a bond issuance of US$3 billion, Najib’s lawyer Wan Aizuddin Wan Mohammed quizzed the former 1MDB CEO over whether he had taken any action over his suspicions about the fundraising exercise.

Wan Aizuddin: You said you had suspicions that the fundraising exercise — something is wrong, there is some nefarious agenda by Jho Low.

Mohd Hazem: Yes, I had suspicions.

Wan Aizuddin: And you said Jho Low told you all these bond issuance is at the instructions of the prime minister.

Mohd Hazem: Yes.

Wan Aizuddin: Wouldn’t that mean the prime minister would also be involved — as per what Jho Low told you — in this nefarious agenda?

Mohd Hazem: Wouldn’t the prime minister be involved? Absolutely yes, in hindsight, yes.

Wan Aizuddin: So that is a very, very heavy accusation to say the prime minister was involved in something illegal with the company.

Mohd Hazem: Yes, to a certain extent, yes.

Wan Aizuddin: Having harboured suspicion that the then prime minister is involved in this nefarious agenda of Jho Low, you still didn’t think it is right and responsible for you as head honcho of 1MDB to go straight to him and clarify?

Mohd Hazem: No.

Wan Aizuddin then suggested that the reason why Mohd Hazem did not feel the need to clarify with and confront Najib with the suspicions that he had was because he was allegedly “playing along” with Low’s plan, but Mohd Hazem disagreed.

While having some suspicions about the fundraising exercise, Mohd Hazem confirmed he did not officially raise his suspicions to the 1MDB board, but only shared his concerns verbally with the then 1MDB chairman Tan Sri Lodin Wok Kamaruddin.

“At that particular time, you were basically dealing with a company that is being managed and runned by the most powerful person in Malaysia — the prime minister. And I would not even dare to report it.

“Like I told you before, it’s either you work with it or quit. You can see the example even beforehand, on the resignation of two directors,” he said. These two directors included former 1MDB chairman Tan Sri Mohd Bakke Salleh.

Asked by Wan Aizuddin, Mohd Hazem later confirmed he did not lodge any report to the police or any authorities or the Companies Commission of Malaysia.

Wan Aizuddin then asked “And even if not the minister of finance himself, you didn’t address your concern to the MOF Inc of the Ministry of Finance?”

Mohd Hazem then replied “You mean the same person?”

Asked again by Wan Aizuddin, Mohd Hazem confirmed he did not take the initiative of telling 1MDB’s sole shareholder MOF Inc of the Finance Ministry that there was something wrong with 1MDB and that he was being instructed by Low on company matters.

Mohd Hazem disagreed with Wan Aizuddin’s suggestion that the reason for his alleged “inaction” was that he was abetting Low in committing fraudulent activities in 1MDB.

Najib previously held these positions simultaneously — prime minister, finance minister, and also chairman of 1MDB’s board of advisers.


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