1MDB wanted US$1.83 billion returned for local investments, court told

The Tun Razak Exchange, a 70-acre development by 1MDB in the heart of Kuala Lumpur, was one of the domestic projects eyed for investment.

KUALA LUMPUR: The High Court in Najib Razak’s corruption trial heard today that 1MDB had decided in 2012 to repatriate US$1.83 billion from its joint venture with PetroSaudi International (PSI) to be put into local investments.

“We wanted to bring back the money to invest in 1MDB projects in Bandar Malaysia and the Tun Razak Exchange,” former 1MDB CEO Shahrol Azral Ibrahim Halmi said during cross-examination by lawyer Muhammad Shafee Abdullah.

Shahrol, who has been in the witness stand since September, added that 1MDB had had to service a RM7 billion loan.

He said 1MDB had wanted to put the US$1.83 billion in domestic investments to settle its debts.

He also disagreed with Shafee who suggested that the company had wanted to repatriate the money because it had lost confidence in the investment.

In the prosecution’s opening statement, it was revealed that 1MDB had borrowed US$1 billion in 2009, purportedly to invest in the joint venture in which it held a 40% stake.

PSI was to take up the remaining 60% of shares by injecting certain assets of reportedly dubious value.

In March 2010, 1MDB entered into what was known as a Murabaha finance agreement where the US$1 billion was converted into useless Murabaha notes. It was also required to invest another US$500 million.

In May the following year, a further US$330 million, said to be the second tranche of investments into the Murabaha financing, was diverted to Good Star Ltd, which belonged to businessman Low Taek Jho.

Najib is standing trial for 25 counts of money laundering and abuse of power charges over alleged 1MDB funds amounting to RM2.28 billion deposited in his AmBank accounts between February 2011 and December 2014.

The hearing continues tomorrow before High Court judge Collin Lawrence Sequerah.

Fake or not? Check our quick fake news buster here.