KUALA LUMPUR: Former prime minister Najib Razak told the High Court in his SRC International case today that businessman Low Taek Jho, popularly known as Jho Low, was adviser to the Terengganu sultan when state investment arm 1MDB was known as the Terengganu Investment Authority (TIA).
He said that in 2009, Jho Low had been close to Sultan Mizan Zainal Abidin who was the Yang di-Pertuan Agong at the time.
“I was made to understand that Jho Low was appointed as adviser to the TIA board of advisers whose chairman was the ruler himself,” he said, reading from his witness statement.
The Pekan MP, who is presenting his defence on seven criminal charges, also said the concept of TIA as he understood it came about following discussions with the ruler and state government.
At the outset of today’s proceedings, ad hoc prosecutor V Sithambaram told trial judge Mohd Nazlan Mohd Ghazali that the defence had only provided Najib’s 243-page statement this morning.
“We have to go through the statement to identify what evidence is inadmissible due to the introduction of hearsay testimonies,” he said, adding that the prosecution would allow Najib to read his statement uninterrupted but reserved the right to apply for the removal of inadmissible evidence.
It was revealed during the ongoing 1MDB trial that Najib took control of TIA before its name was changed to 1MDB by amending its constitution on Sept 2, 2009.
Today, the former prime minister said he kept Jho Low at 1MDB as he had portrayed himself as an individual who was influential in the Middle East.
“I believed he could facilitate investment matters as these states have excess cash due to the increase in crude oil prices,” he added.
For this reason, he said, he felt that Jho Low’s influence and contacts would also benefit 1MDB’s investment goals.
He said the ruler and state government decided to set up TIA in early 2009 with a capital of RM11 billion. RM6 billion would come from oil royalties owed to the state by Putrajaya while the remaining RM5 billion would come from the issuance of Islamic medium-term notes guaranteed by the federal government.
Najib, who was also the finance minister, said the state could not agree to the terms of the bond, resulting in Cabinet approval for the takeover of TIA.
“The decision was made to protect the state and king from embarrassment. It was also to prevent any negative global impact on the Malaysian bond market,” he said.
Najib said the 1MDB directors were from TIA as they had experience serving in other government-linked companies.
He added that the 1MDB management and board had not shown him any of the amendments to the company constitution giving the prime minister specific powers.
Najib is accused of abusing his power as prime minister by giving government guarantees on SRC International’s RM4 billion loan from Retirement Fund Inc.
He is also charged with three counts of money laundering and three counts of criminal breach of trust in the transfer of RM42 million to his accounts from the former 1MDB unit.
He was charged with committing the offences at AmIslamic Bank Bhd on Jalan Raja Chulan and the Prime Minister’s Office in Putrajaya between Aug 17, 2011 and Feb 10, 2015.
The hearing continues.