Shahrol conceded that he never questioned the fundraising efforts, as he was no longer CEO at the time, but only sat on the 1MDB board as one of the directors.
KUALA LUMPUR (Sept 1): Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi admitted at the High Court today that he had signed and approved a US$2 billion refinancing agreement with Deutsche Bank in 2014, thinking it was for US$1 billion.
Cross-examined by defence counsel Wan Aizuddin Wan Mohammed in the 1MDB-Tanore trial, Shahrol further conceded that he never questioned the fundraising efforts, as he was no longer CEO at the time, but only sat on the 1MDB board as one of the directors.
As such, Shahrol claimed he only signed the approvals based on the directors’ circular resolutions.
Wan Aizuddin: The company was already US$39 billion in debt, and now it was not only considering to take up a loan of US$300 million, but US$2 billion. You never questioned that?
Shahrol: In consistent with [the views of fugitive financier], Jho Low, it was a refinancing, not another loan.
Wan Aizuddin: Was there any particulars in the loan about the company servicing for refinancing?
Shahrol: Not at this point. The approvals were already given for the proposal of fundraising of up to US$1 billion, and the authority was given to the CFO (chief financial officer) and CEO (at the time). I didn’t question the purpose of the fundraising as the CEO and CFO were involved.
Wan Aizuddin: In spite of the heading, the contents say US$2 billion. Which is it, US$1 billion or US$2 billion?
Shahrol: At the time I did not notice.
In 2014, 1MDB was in the midst of planning the listing of independent power producer (IPP) 1MDB Energy Group on Bursa Malaysia by way of an initial public offering.
According to Shahrol’s 270-page witness statement, the project was known as Options Buy Back, which is the process to redeem the "Aabar Options" as a result of the IPP purchase in 2012 between 1MDB and Aabar Investment PJS Ltd (Aabar BVI).
However, Shahrol denied being involved directly with these efforts, as he was no longer the CEO of 1MDB, but was holding the Oil & Gas and Energy, and Financial Services portfolio in the Performance Management And Delivery Unit (Pemandu).
So as one of 1MDB directors at the time, whenever the board was discussing issues related to the energy sector at 1MDB, Shahrol claimed he would withdraw himself from the meeting to avoid conflict of interest with his position in Pemandu.
According to Shahrol, the 1MDB board gave the approval to 1MDB Energy Holdings Ltd to take up a loan from Deutsche Bank amounting to US$250 million on May 22, 2014 and another US$975 million on Aug 21, 2014 to buy back the Aabar Options.
The loan was also approved by Datuk Seri Najib Razak as a shareholder of 1MDB, as well as on behalf of the Minister of Finance Inc (MoF Inc).
In the 1MDB-Tanore trial, Najib is facing four counts of abuse of power for using his position as prime minister, finance minister and 1MDB board of advisers’ chairman to receive gratification worth RM2.28 billion.
Najib also faces 21 counts of money laundering involving over RM4.3 billion.
The trial before Justice Collin Lawrence Sequerah continues tomorrow.
Editing by S Kanagaraju
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