Two firms linked to fugitive financier Jho Low pocketed RM494 million (S$162 million) in profits on discounted 1MDB bonds issued in 2009, a Malaysian court heard this week during the trial of former prime minister Najib Razak.
The revelation came about on Wednesday when Najib's counsel Muhammad Shafee Abdullah was questioning a witness, Datuk Shahrol Azral Ibrahim Halmi, former chief executive of 1Malaysia Development Berhad (1MDB).
Shafee told the High Court that the two firms, Aktis Capital Singapore and Country Group Securities, bought the bonds at a lower price and sold them on the same day on May 27, 2009, at a higher price to two government retirement funds - Employees Provident Fund (EPF) and Social Security Organisation (Socso) - and insurance firms.
"Malaysians got screwed twice as the bonds were sold at a discount, and then sold at a higher value to... EPF, Socso and insurance companies," Shafee told the court.
1MDB, started by Najib soon after he became premier in 2009, had in that year issued RM5 billion in Islamic medium-term bonds through local financial institution Ambank.
Aktis Capital, a firm linked to Low, made RM74.6165 million by flipping the bonds quickly.
Country Group, which pocketed RM420 million, was owned by Low's father, Larry Low Hock Peng, according to documents provided by Shafee in court.
Previous testimony from Mr Shahrol, the ninth witness in the trial, revealed that 1MDB incurred RM30 billion worth of debt within five years of its formation, and this had to be borne by the government.
Najib, 66, 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.
The defence has distanced Najib from Low, with Shafee telling reporters in August that Low had "misled" Najib over 1MDB.