KUALA LUMPUR, Sept 2 ― More than US$681 million or nearly 70 per cent of a US$975 million sum borrowed by a 1Malaysia Development Berhad (1MDB) subsidiary was diverted in September 2014 to yet another fake Aabar entity in the island nation of Seychelles, the High Court heard today.
This was just months after US$175 million was also channelled from the same 1MDB unit to a cloned Aabar company in the British Virgin Islands (BVI), the court heard.
Today, former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi agreed that bank documents had shown a total of more than US$681 million being paid by 1MDB Energy Holdings Limited to the fake Aabar company in Seychelles.
Shahrol Azral was testifying as the ninth prosecution witness in former prime minister Datuk Seri Najib Razak’s corruption and money-laundering trial involving 1MDB funds.
In this trial, it emerged that Abu Dhabi’s sovereign wealth fund International Petroleum Investment Company’s (IPIC) subsidiary Aabar Investments PJS was touted to be interested in joint ventures with 1MDB, but evidence has since shown that 1MDB had instead dealt with fake entities bearing strikingly similar names but who were not actually linked to the real entity.
The two fake entities are both named Aabar Investments PJS Limited, with one incorporated in the British Virgin Islands and the other incorporated in Seychelles.
The court heard today how 1MDB’s subsidiary 1MDB Energy Holdings Limited in 2014 had taken on two massive loans totalling US$1.225 billion from Deutsche Bank in Singapore, only to pay out most of its borrowings to the fake Aabar companies instead of using the funds for the original intended purpose.
For the first loan of US$250 million released on May 26, 2014, 1MDB Energy Holdings had transferred US$175 million to the BVI entity Aabar Investments PJS Limited’s account at the BSI bank in Lugano, Switzerland.
As for the US$975 million made available on September 1, 2014, Shahrol Azral agreed when shown bank documents that 1MDB Energy Holdings Limited had sent two payments to the Seychelles-incorporated Aabar Investments PJS Limited’s UBS bank account in Singapore ― US$223.333 million on September 3, 2014 and US$457,984,607 on September 30, 2014.
While confirming the details shown in the UBS bank documents, Shahrol Azral also told Najib’s lawyer Wan Aizuddin Wan Mohammed that he had not seen these documents back in 2014 or during investigations for the 1MDB case.
In 2014, Shahrol Azral was no longer 1MDB CEO but was still a member of 1MDB’s board of directors.
Shahrol Azral told Wan Aizuddin that 1MDB’s board of directors were not briefed about the 1MDB subsidiary’s transfer of both sums to the fake Aabar companies, further confirming that 1MDB management did not seek the board’s approval to undertake the US$457 million transfer.
On the first day of the trial, the prosecution had said it would prove some of the funds that were transferred to the two fake Aabar entities had in 2014 allegedly made its way to Najib’s bank account in 2014, namely two separate sums in sterling pounds that were equivalent to RM 4,093,500 and RM 45,837,485.70.
About the two fake Aabar
Shahrol Azral agreed with Wan Aizuddin that the Aabar BVI entity is not affiliated with the real Aabar that belongs to IPIC, and that he could now confirm in hindsight that the fake Aabar was operated by two “rogue” officers from IPIC ― namely IPIC managing director Khadem Al-Qubaisi and Aabar Investments PJS’s CEO Mohamed Badawy Al-Husseiny.
As for the Aabar in Seychelles, Shahrol Azral was shown documents for the first time on the company’s incorporation on May 21, 2014 which was just about three months away from the US$681 million transfers by the 1MDB unit. He noted that a certificate of incumbency shown in court stated that the real Aabar was named as this company’s shareholder.
Also shown documents related to the Seychelles-based Aabar’s opening of a bank account, Shahrol Azral agreed that it showed the Abu Dhabi government being listed as the company’s beneficial owner, but declined to comment if this was true as this was the first time he had seen the documents.
Najib’s trial before High Court judge Collin Lawrence Sequerah resumes tomorrow morning, with Najib’s lawyer Tan Sri Muhammad Shafee Abdullah expected to wrap up cross-examining of Shahrol Azral.
MORE TO COME