Jho Low stole 1MDB funds before Najib’s bank account was opened, says defence

The defence in Najib Razak’s 1MDB trial today said that fugitive businessman Low Taek Jho or Jho Low had misappropriated funds belonging to the strategic investment company through the profit from the issuance of RM5 billion Islamic medium-term notes (IMTN) without Najib’s knowledge.

Najib’s counsel Muhammad Shafee Abdullah also contended at the High Court today that Najib had not received money originating from the bond issued in 2009 by 1MDB predecessor Terengganu Investment Authority as the former prime minister’s bank account in AmBank was only opened on Jan 13, 2011.

Former 1MDB non-executive director Ismee Ismail, who is the 13th prosecution witness, agreed to the lawyer’s contention that no proceeds from the IMTN bond flipped by Jho Low ever went to Najib’s personal account.

Shafee, referring to an article from an online blog Malaysia Today, also told the court that Jho Low had received money misappropriated from the issuance of the bond, which was transferred into two companies related to him – Country Group Securities PCL and Aktis Capital Singapore Pte Ltd – totalling RM74 million in 2009.

“The two companies made an easy profit when they subscribed to 1MDB bonds at a discount before reselling them at face value (or value on paper) in 2009 to Employees Provident Fund (EPF) and an insurance company, Prudential.

“We wish to establish that none of the IMTN profit went into Najib’s account. The money in Najib’s account was only because of the arrangement of the Arab donation. My client was under the impression it was a donation from the Saudi Ministry of Finance.

“Najib’s Ambank account which allegedly received billions of ringgit in 1MDB funds was opened in 2011, so it had nothing to do with the IMTN,” said Shafee.

The lawyer then asked the witness whether he was familiar with the term “working in a silo”, which had been repeated by three members of the 1MDB top management when they were called to the witness stand – former 1MDB CEOs Shahrol Azral Ibrahim Halmi and Mohd Hazem Abd Rahman as well as its chief financial officer Azmi Tahir.

To this, Ismee said yes.

Shafee: Is it a good practice in the corporate field?

Ismee: No.

Shafee: Do you agree with me it is anathema, which is so opposite to good governance?

Ismee: Yes.

Shafee: And that is something completely discouraged because secrecy breeds corruption, breeds fraudulent behaviour in any corporation. Working in a silo, therefore, is the breeding ground for a corporation to be corrupted, to be full of fraudulent transactions such as what happened in 1MDB. Do you agree with me?

Ismee: That explains why we failed.

Najib, 68, is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The trial before justice Collin Lawrence Sequerah continues tomorrow.