KUALA LUMPUR – 1Malaysia Development Bhd (1MDB) did not do thorough due diligence on Petrosaudi International Ltd (PSI) before considering a US$1 billion (approximately RM4.73 billion in today’s exchange rate) joint venture with the latter.
A witness in Datuk Seri Najib Razak’s corruption trial tells the high court here today.
Former 1MDB general counsel Jasmine Loo agreed with Najib’s lead defence counsel, Tan Sri Muhammad Shafee Abdullah, that she did not know for a fact if PSI was located in Saudi Arabia. This information was conveyed to her by the state investment fund’s former chief executive officer Datuk Shahrol Azral Ibrahim Halmi.
Loo said she was under the impression that PSI was located in the kingdom but when questioned by Shafee today, she admitted that she could not recall any documents confirming its origins.
Shafee: We (the defence) have done the work. There’s no PSI in Saudi Arabia. (But) when I put it to you, your answer is “I don’t know”. This is what 1MDB should have known before entering into such a serious agreement with PSI.
Loo: I supposed so, yes.
Shafee: And nobody, apart from the representation by Shahrol, Jho Low (Low Taek Jho), or the 1MDB management…nobody thought to confirm it?
Loo: I haven’t seen confirmation of such.
Loo also agreed with Shafee’s suggestion that PSI is “a work of fraud”, and that it was not Najib’s job to determine if PSI was a real Saudi Arabian entity.
Former prime minister Najib at the time, was also finance minister and chairman of 1MDB’s advisory board.
Shafee then moved on to questioning Loo on several documents that touched on 1MDB and its joint ventures with several companies, which had been prepared before Loo joined 1MDB in May 2011.
This irked deputy public prosecutor Mohamad Mustafa P Kunyalam who told the court that the direction of cross-examination appeared to be putting Loo on trial instead of Najib.
“I have to object to these questions. It’s as if this witness (Loo) is on trial and not his (Shafee’s) client,” he said.
The DPP’s objections prompted judge Datuk Collin Lawrence Sequerah to tell Shafee to narrow his direction of questioning.
“We need to draw a line, that this witness is not on trial. What are you trying to show?” Sequerah said to Shafee.
To this, the lawyer replied: “Every witness who is not credible is always on trial.”
Shafee said his cross-examination of Loo on the documents showed that she should have studied them before joining 1MDB as part of her “homework” as a legal advisor to the company.
In 2019, ex-CEO Shahrol testified that 1MDB had relied on a Google search to verify PSI’s background in deciding if the state investment firm should enter a US$1 billion joint venture with its holding company Petrosaudi Holdings (Cayman) to form the 1MDB-PetroSaudi Ltd joint venture.
The prosecution has argued that the joint venture, known as Project Aria, was created by Najib with 1MDB borrowing US$1 billion supposedly to invest in the project.
Najib is facing four charges of using his position to obtain an alleged RM2.3 billion bribe in 1MDB funds, as well as 21 charges of money laundering involving the same amount.
The trial before Sequerah continues tomorrow. – April 1, 2024