KUALA LUMPUR - State fund 1MDB incurred RM30 billion (S$10 billion) of debts within five years of its formation which had to be borne by the Malaysian government, a key witness told a court on Tuesday (Oct 1).
1MDB's former CEO Shahrol Azral Ibrahim Halmi, testifying in the trial of ex-Malaysian premier Najib Razak, also said that when the scandal broke in 2014, Najib did not ask what had happened to the funds, and did not even once call for a board meeting.
Datuk Shahrol, 49, was the first chief executive officer of 1MDB, soon after its formation in 2009, and left in 2013.
"No, he never did," Mr Shahrol responded, when asked by prosecutor Gopal Sri Ram if Najib had called him, or other board members, for a meeting to inquire about the whereabouts of the monies. "Never," he added.
Mr Shahrol told the High Court that among debts incurred by 1Malaysia Development Berhad (1MDB) was that from the issue of RM5 billion bonds that were guaranteed by the Ministry of Finance.
There were also the subsequent bonds totalling US$3.5 billion (S$4.8 billion) that were jointly guaranteed by Abu Dhabi's International Petroleum Investment Company (IPIC) and the MOF, the court heard.
Najib, 66, was Finance Minister then and also headed 1MDB's board of advisers.
Najib is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds, besides 21 charges of money laundering involving the same amount.
Mr Shahrol had told the court last week that Najib had full knowledge of the 1MDB investment deals that went awry after the funds were siphoned off by fugitive Malaysian financier Low Taek Jho, who is widely known as Jho Low.
The former CEO had also described to the court that Low and Najib had a symbiotic relationship, with the former executing the wishes of the latter and the latter approving the decisions.
Mr Shahrol, who is the ninth prosecution witness, on Tuesday described the pattern of financial "leakages" - the borrowing of funds for projects that were supposedly "good" for the country, and then siphoning off some of these borrowed funds.
"I now realise the pattern of leakages from 1MDB from 2009 to 2013 has always been to borrow funds for projects that are ostensibly good for the nation and to siphon some of the borrowed funds."
"Throughout the years, the method used by the perpetrators has been refined and tightened up, in the sense that the talking points and mandated tight timelines for fundraising leave less and less room for discussion at the 1MDB management and BoD (Board of Directors) levels," he said.
During the hearing, he also revealed that he was perhaps removed from his position after voicing his concerns over the unreasonably speedy transactions involving billions of ringgit.
Mr Shahrol also claimed that he was coached to downplay the roles of Najib and Low in 1MDB prior to the 2010 Public Accounts Committee (PAC) hearing, which was also orchestrated by the two men, the court heard.
The PAC is a bipartisan parliamentary committee that looks into government spending.
Meanwhile, in 2012, Mr Shahrol said he was awarded a bonus of nearly RM1.5 million when he was drawing about RM80,000 a month, due to his performance. His last drawn salary was RM99,000 a month in 2013.
