Witness at Najib's 1MDB-linked corruption trial says $660 million moved to secret bank account

Former Malaysian premier Najib Razak (seated) on June 10, speaking to the main defence lawyer, Tan Sri Muhammad Shafee Abdullah (in black, standing), during a court recess at the ongoing SRC International trial, at the Kuala Lumpur High Court.
Former Malaysian premier Najib Razak (seated) on June 10, speaking to the main defence lawyer, Tan Sri Muhammad Shafee Abdullah (in black, standing), during a court recess at the ongoing SRC International trial, at the Kuala Lumpur High Court.PHOTO: BERNAMA

KUALA LUMPUR - The Malaysian trial of how RM42 million (S$13.8 million) from a government fund ended up in former premier Najib Razak's bank accounts is ongoing, even as much attention this week shifted to a sex scandal engulfing a Cabinet minister.

Najib is facing seven charges tied to criminal breach of trust, money laundering and abuse of power involving SRC International, a former subsidiary of state fund 1Malaysia Development Berhad (1MDB), and how its funds were transferred into his private bank accounts.

With much focus shifting to the explosive sex video case, the Najib trial this week has been placed lower on the news menus of online sites and daily newspapers.

Nevertheless, surprises revealed in his trial are far from over.

The court this week heard about RM2 billion (S$660 million) was channelled to a secret bank account, and about the fugitive ex-SRC chief executive wanted by the authorities.

This followed eye-popping witness testimony last month that state pension fund Kumpulan Wang Persaraan (KWAP) released RM4 billion in cash - its biggest-ever loan - to SRC after getting two letters of guarantee for the funds.

One letter was signed by Najib, who was also Finance Minister at the time. The other was signed by then Second Finance Minister Ahmad Husni Hanadzlah.

 
 
 

In late May, former KWAP chief executive Azian Mohd Noh had testified that a total of RM4 billion in loans were released to SRC in August 2011 and March 2012, although its application failed to meet KWAP's investment policy requirements.

On Wednesday, the Kuala Lumpur High Court was told by high-profile witness Ismee Ismail that former 1MDB chief executive Shahrol Azral Ibrahim Halmi had not informed the SRC board about a secret bank account which the company had opened in January 2011.

Tan Sri Ismee was SRC chairman from August 2011 to August 2014.

Defence counsel Harvinderjit Singh had shown Mr Ismee documents relating to an AmBank Islamic account, ending with the numbers 736, that was opened by Datuk Shahrol.

"Shahrol Azral did not inform us (the SRC board) of the earlier account," said Mr Ismee.

He said that Mr Shahrol, and former SRC CEO Nik Faisal Ariff Kamil - who is currently missing and wanted by the authorities - should have told the board of the account's existence.

Mr Ismee said the documents showed the transfer of the first RM2 billion loan from KWAP into this secret bank account, instead of into SRC's other AmBank Islamic account, ending with the numbers 650, which was known to the board.

Mr Ismee, the 39th witness to take the stand, testified RM1.5 billion had been transferred to BSI bank in Switzerland and RM300 million to another bank in Hong Kong.

"The remaining RM200 million was retained locally for SRC's operational expenses," said Mr Ismee.

Mr Ismee said he resigned as SRC chairman on August 15, 2014, after finding out that the company had yet to submit its 2013 audited accounts, despite an earlier claim that they had been submitted.

Unlike the first few days of the trial, reporters and members of the public who turn up at the Najib trial daily has thinned out.

Najib himself looked relaxed in media pictures of him entering and leaving the court these past weeks.

On Wednesday, reporters asked him about the sex video scandal, but Najib declined to comment.

On Tuesday, Najib had posted on his Facebook page a GIF of Michael Jackson eating popcorn.

Later on Wednesday, Najib wrote that he was just "sitting at the side eating popcorn while watching a movie".