1MDB settled bond payment debt with IPIC as wanted by Najib, court told

Former prime minister Najib Razak at the High Court in Kuala Lumpur today.

KUALA LUMPUR: The High Court in Najib Razak’s 1MDB trial heard today that the former prime minister had taken active steps to stop Abu Dhabi from going to court after the investment arm defaulted on a bond payment guaranteed by IPIC in 2012 for the acquisition of two power plants.

Amhari Efendi Nazaruddin, who once served as Najib’s special officer, said the former leader had invited him to his private residence in Jalan Langgak Golf in 2016 and ordered him to meet Khaldoon Mubarak, the CEO of Mubadala in the capital of the United Arab Emirates.

“He did not want Abu Dhabi to go to the International Arbitration Court over the ‘binding term sheet’ agreement between IPIC (International Petroleum Investment Co) and 1MDB,” he added.

At the meeting, he said, Najib told him that it would affect the diplomatic ties between the two countries if Malaysia failed to settle the bond payment.

“It could also turn out to be a political issue in the 2018 general election,” he said when examined by deputy public prosecutor Ahmad Akram Gharib.

Amhari, the eighth prosecution witness, said Najib wanted him to travel to Abu Dhabi to obtain assurance that the matter would be settled amicably instead of going to court.

“This was one of Najib’s secret assignments for me as 1MDB’s debt to IPIC was widely discussed,” he added.

Amhari said he also came to know that Najib and fugitive businessman Low Taek Jho had been actively involved, albeit behind the scenes, in settling the issue between the two nations.

“Both made sure I met Khaldoon as part of the damage control strategy,” he said.

Through Khaldoon, he said, he came to know that Malaysia had made “many promises” that were not fulfilled. However, he said he was unsure what these were.

He said he and Khaldoon had agreed that both parties should go for arbitration, with lawyers for IPIC and 1MDB handling the matter.

IPIC and 1MDB reached an agreement in 2017 where the Malaysian fund agreed to pay US$1.2 billion to IPIC and assumed responsibility for future principal and interest payments for the bonds.

The 1MDB management claimed to have paid IPIC’s British Virgin Islands-registered subsidiary, Aabar Investment, but Aabar said it never received the money as its subsidiary, which also had the same name, was based in Abu Dhabi.

The Pakatan Harapan government, which was voted into power last year, has applied to a London High Court to set aside the consent order.

The government meanwhile says it will not pay the remaining US$4.32 billion but will instead demand the return of the US$1.2 billion already been paid.

Najib is facing 25 charges of money laundering and abuse of power over alleged 1MDB funds in his AmBank accounts.

He is accused of abusing his position to obtain RM2.28 billion in bribes in February 2011 and December 2014.

He is also said to have transferred RM2.28 billion in illegal funds to his bank accounts and to have subsequently used the money.