KUALA LUMPUR, April 18 — None of the up to 20 people including bankers and lawyers who viewed agreements 1Malaysia Development Berhad (1MDB) signed with an “Aabar” noticed the latter was actually a fake firm, the High Court heard today.
Former 1MDB chief financial officer Azmi Tahir said this while testifying as the 12th prosecution witness in ex-prime minister Datuk Seri Najib Razak’s trial over the misappropriation of more than RM2 billion of 1MDB funds.
Shown several agreements between 1MDB subsidiaries and the fake Aabar including those signed in 2012, Azmi said he did not know then that the Aabar Investments PJS Limited in the agreements was a fake entity.
Shown additional documents today, Azmi agreed with Najib’s lawyer Wan Aizuddin Wan Mohammed that there was a major difference in the address between the fake British Virgins Island-incorporated Aabar and the actual Abu Dhabi-based Aabar. The actual Aabar Investments PJS also does not have the word “Limited” in its name.
Azmi said, however, that this discrepancy did not jump up at him, as he was more focused on the contents of the agreements on the mechanics of share options in 1MDB entities in order to be able to brief the Securities Commission for a proposed public listing of 1MDB energy assets on the Malaysian stock exchange.
Wan Aizuddin: And you never realised this difference when you were looking at these documents?
Azmi: No. We had lawyers, we had bank advisers, we had 30, 40 pairs of eyes on it.
When Wan Aizuddin asked if nobody had realised anything, Azmi suggested that sometimes the first part of the document may not be looked at so much and added that “nobody highlighted” the Aabar to be fake.
Wan Aizuddin: That is not a very good excuse. Point is it wasn’t noted during due diligence.
Azmi: It wasn’t noted, it wasn’t highlighted.
At one point when asked if he was more focused on the substance of the agreements rather than the nitty gritty of the identity of the company that 1MDB units were signing with, Azmi replied: “Yes, it wasn’t highlighted to us by advisers or lawyers as well.”
Azmi said at the time that due diligence work was being done, 1MDB had thought the Aabar it was signing with was the same as the actual Aabar.
He also said that the National Audit Department’s 2015 audit on 1MDB then had seen questions being raised over whether this Aabar was the fake Aabar, and that 1MDB deputy chief financial officer Terence Geh had said it was the same as the other Aabar as an incumbency document showed it had the same directors and was also owned by Abu Dhabi’s sovereign wealth fund International Petroleum Investment Company (Ipic).
Azmi said that he finally knew for sure about the fake Aabar during investigations on 1MDB by the police and the Malaysian Anti-Corruption Commission which started around 2015, noting that before this he did not know for certain as he did not have any other information whether it is a fake company.
With assertions being made by investigators that the Aabar that 1MDB was dealing with was a fake company, Azmi said in 2015 he still had some doubt about whether 1MDB was involved with a fake Aabar “because we were told that government was being attacked, Datuk Seri Najib was being attacked so these were all investigations that still need to be investigated”.
But by the time his witness statement was being recorded, Azmi said it became clearer that 1MDB could have been dealing with the fake company.
“Later when my statement was taken, during that period of time, during this series of investigation where this witness statement came about, when shown all these other things, money flows and things like that, it became more apparent it could be fake Aabar,” he said.
Asked by Wan Aizuddin whether he had taken his own initiative to investigate whether 1MDB had been sending money to a fake Aabar entity, Azmi replied: “Well, if you note at that time, the board did not say specifically to do anything about this. It was investigated, but for me to take my own initiative, no, there was no instructions, directions to do that.”
Wan Aizuddin: But on your own initiative, as CFO, you did not take it on yourself to further investigate?
Previously, Azmi had testified that he as well as 1MDB directors and 1MDB management did not notice the slight difference in the names of the fake and real Aabar, highlighting that the fake Aabar had used the same company address and was also represented by the real Aabar’s CEO Mohamed Badawy Al-Husseiny.
Previously, former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi had also testified in this trial that he did not realise that there was a difference between the two Aabar, due to similarities such as the office address and the agreement document using “Aabar Investments” as the short form for the company’s name.
Previously, the High Court had heard how 1MDB Energy Holdings Limited had in 2014 taken on two massive loans totalling US$1.225 billion from Deutsche Bank in Singapore to buy back share options from Aabar, but the bulk of these borrowings or over US$856 million were paid out in 2014 to two fake Aabar companies incorporated in British Virgin Islands and Seychelles.
On the first day of trial, the prosecution had said it would show that over RM49 million of funds from those sent by 1MDB to the two fake Aabar companies had made it to Najib’s personal bank account, involving funds in foreign currency equivalent to RM4,093,500 in June 2014 and equivalent to RM 45,837,485.70 between October 2014 and December 2014 allegedly transferred to his account.
The trial before High Court judge Datuk Collin Lawrence Sequerah resumes this Wednesday, where Azmi is expected to continue testifying.