Shahrol claims innocence in the US$577 mil payment to ‘fake Aabar’

(The Edge Markets) – Former 1Malaysia Development Bhd (1MDB) CEO Datuk Shahrol Azral Ibrahim Halmi told the High Court today he was not aware Aabar Investment PJS Ltd (Aabar BVI), the company which 1MDB paid US$576.94 million to as security deposit for a corporate guarantee, was not a subsidiary of International Petroleum International Corp (IPIC).

Aabar BVI was in fact a company incorporated by Low Taek Jho — better known as Jho Low — and his associates in British Virgin Islands (BVI).

During the examination-in-chief today, Shahrol said he thought he had signed an agreement with the real Aabar, because the names of the companies were similar. He only later realised the difference between the real Aabar and Aabar BVI when it made the news.

Note that the real subsidiary of IPIC is named Aabar Investment PJS, without the “Limited”.

The amount remitted was US$576.94 million paid to Aabar BVI. The prosecution’s ninth witness was not sure which party had decided on the security cost of US$576.94 million to be paid to the fake Aabar.

When asked by senior deputy public prosecutor Datuk Seri Gopal Sri Ram as to why he did not have any suspicions on the transaction, Shahrol said it appeared to be a legitimate government-to-government (G2G) initiative.

“I had absolutely no suspicions primarily because this was a G2G initiative, as evidenced by the IPIC guarantee. Also this particular transaction falls completely under Article 117 of 1MDB’s memorandum and articles of association as it involves national policy as well as strategic implications for the country,” he said.

“Therefore, when Jho Low and Jasmine [Loo] put all these transactions or requirements for the guarantee, I had accepted it at face value,” Shahrol added.

Furthermore, the witness clarified that there was a sense of urgency in the business dealings, which made it more difficult for the transaction to be scrutinised.

“The speed element has always been there. We had [trusted] each of the working parties to do their bit and to do so in the best interest of the country and the company. So, had we been given more time, there would probably have been questions raised on the peculiar names of the companies,” he explained, adding it was Jho Low who injected the element of urgency so that the Abu Dhabi hosts did not change their minds.

Shahrol went on to highlight that the transaction was approved by the Finance Minister, ie Datuk Seri Najib Razak at the time, only three days after a letter was sent to the ministry by 1MDB. This, according to him, underscored the sense of urgency by Najib himself as well.

The witness in his testimony emphasised again he did not know the US$576.94 million paid to the fake Aabar was meant to be abused.

“It is made via good faith, based on documents prepared by Jasmine Loo, Terence Geh and Goldman Sachs’ Tim Leissner. I would not have approved the remittance should I know that it would be abused.

“Following investigations, now I know that the security deposit was arranged by Jho Low for 1MDB’s money to enter into the account, which is controlled by him, for the purpose that the funds are abused,” he said.

Loo was 1MDB’s legal officer while Geh was 1MDB’s deputy financial officer. Both of them are missing and are believed to be not in the country.