Witness: CEO told MoF Inc 1MDB reported directly to Najib

KUALA LUMPUR - The Finance Ministry's former deputy secretary-general today told the High Court here that 1Malaysia Development Bhd (1MDB) reported directly to Datuk Seri Najib Razak on the company's operations and affairs.

Datuk Siti Zauyah Mohd Desa, 63, said the matter was informed to the Minister of Finance Incorporated (MoF Inc) by 1MDB chief executive officer (CEO) Datuk Shahrol Azral Ibrahim Halmi during the process of discussions and transferring of Terengganu Investment Authority (TIA) shares to MoF Inc in 2009. TIA was officially converted to 1MDB in 2009.

The 26th prosecution witness said this when she was cross-examined by lawyer Tan Sri Muhamad Shafee Abdullah who represented Najib at the trial of the former prime minister involving the misappropriation of RM2.3 billion from 1MDB.

The witness said 1MDB's management refused to cooperate and discuss the company’s Memorandum and Articles of Association (M&A) which were not the same as other companies under MoF Inc which also contained amendments that were made without permission.

"They (1MDB) had the PM (prime minister) behind them, so they told me to only deal with the PM," she told the court.

Muhammad Shafee: How did you get the idea that the PM was behind them? Who’s the culprit that told you this?

Siti Zauyah: Shahrol Azral told me...he refused to discuss matters regarding (M&A).

The witness said she informed the second Finance Minister Datuk Seri Ahmad Husni Hanadzlah about the 1MDB’s M&A issue, however, Ahmad Husni told her that he did not want to get involved.

Siti Zauyah said besides Ahmad Husni, former Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah also told her not to proceed with any actions when she discussed the matter with him.

Previously, Ahmad Husni told the court that he had been asked by Najib not to interfere in 1MDB's plans to invest in oil services and production company PetroSaudi International Ltd (PSI).

Ahmad Husni also told the court about the concerns he had over the country’s situation and Najib following the establishment of 1MDB, which led him to send a personal letter to the Pekan Member of Parliament in August 2010.

In her previous testimony, Siti Zauyah said Article 117 of IMDB’s M&A which states the appointment and removal of any director of the company will not take effect without the written approval of the prime minister was not referred to her division during the process of discussions and transferring of TIA shares to MoF Inc.

Article 117 also states that the prime minister’s prior written approval is also required for any financial commitment (including investment) and restructuring which is likely to affect the guarantee given by the government for the benefit of the company, the national interest as well as national security.

Siti Zauyah said she did not know how clause 117 was inserted as it was prepared earlier by 1MDB’s company secretary before it was transferred to MoF Inc.

Najib, 68, is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The trial before Judge Datuk Collin Lawrence Sequerah continues tomorrow. - BERNAMA