We never discussed buying Devonshire Funds, former 1MDB CEO tells court

Former 1MDB CEO Shahrol Azral Ibrahim has denied playing an ‘active role’ in embezzling the company’s funds.

KUALA LUMPUR: Former 1MDB CEO Shahrol Azral Ibrahim Halmi told the High Court in Najib Razak’s trial for abuse of power that the sovereign fund had never discussed any proposal to acquire a purported subsidiary company called Devonshire Funds Limited.

Shahrol said this in response to Najib’s lawyer Wan Aizuddin Wan Mohammed who asked about five tranches of payment amounting to over US$646 million from 1MDB’s subsidiary company, 1MDB Global Investment Limited, to Devonshire between March 20 and 21, 2013.

“No, the board of directors never approved any acquisition of Devonshire at the material time nor was there any shareholder’s (Najib) resolution to approve this acquisition,” he said.

Aizuddin also showed the witness a document that claimed Devonshire was a 1MDB subsidiary company.

The court previously heard that Goldman Sachs helped 1MDB to raise US$3 billion in bonds for the Tun Razak Exchange (TRX) and Bandar Malaysia projects in 2012. The American bank received over US$200 million as arrangers’ fees.

The prosecution contended that from the US$2.72 billion paid to 1MDB Global Investment, over US$1.06 billion entered into the accounts of two fiduciary funds, namely, Devonshire Funds and Enterprise Emerging Market Fund (EEMF), in March 2013.

From this, over US$890 million was then transferred to Tanore Finance Corporation which was controlled by fugitive Tan Kim Loong. From the amount, over US$681 million was subsequently deposited into Najib’s account.

Shahrol also told the court that 1MDB directors never discussed the utilisation of the US$3 billion but he recalled his then-chief financial officer, Azmi Tahir informing the company that the funds “will be placed with the fund manager”.

Aizuddin: Do you agree that since there was no approval from the board of directors, the US$3 billion was embezzled without your knowledge as well as the shareholder?

Shahrol: It was done before the board of directors’ knowledge but I cannot speak on behalf of the shareholder on his knowledge.

The witness, however, disagreed that he attempted to mislead Najib by sending a proposal letter to the then prime minister on 1MDB’s joint venture with Abu Dhabi’s Aabar Investments PJS (Aabar). He also denied he played an “active role” in embezzling the company’s funds.

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

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

Before the day’s proceedings ended, Sequerah asked the lawyers when the defence would be able to conclude its cross-examination on Shahrol.

Co-counsel Muhammad Shafee Abdullah said that Aizuddin may take about two hours tomorrow while he will be doing the wrapping up.

Ad-hoc prosecutor Gopal Sri Ram then told the court that the prosecution will re-examine Shahrol on Thursday.