1MDB Trial: Former CEO worried over company’s high debts, wanted to resign

KUALA LUMPUR, Sept 17 (NNN-BERNAMA) — A former chief executive officer (CEO) of 1Malaysia Development Berhad (1MDB) told the High Court here today that he used to be worried because the company was high in debts and he had doubts about its capacity to repay the debts.

Mohd Hazem Abdul Rahman, 48, said among the debts that had to be paid in 2014 was to Maybank for a loan taken by 1MDB to buy Tanjong Power shares in 2012, amounting RM2.5 billion.

“There were many 1MDB expenses which involved project financing funds such as development of infrastructure for TRX (Tun Razak Exchange) and JIMAH (JIMAH Energy Ventures), which were financed through new debts,” he added.

At that time, he said, he did not know whether 1MDB still had its fund abroad or that it had been used for UMNO, as it had been told to him earlier.

The 1MDB’s fund abroad then was at an estimated US$3.8 billion (RM13 billion), he said, adding that the amount was enough to pay off Maybank’s debt and also as start-up capital for any 1MDB projects in Malaysia.

Mohd Hazem said this when reading out his witness statement at the trial of former Prime Minister Datuk Seri Najib Tun Razak’s corruption case involving RM2.3 billion in 1MDB funds.

The 10th prosecution witness, who was 1MDB CEO from March 2013 until Jan 2015, said despite being the CEO, he had no access nor was in the know about the company’s funds abroad.

The persons with access to it were fugitive businessman Low Taek Jho or Jho Low and Jasmine Loo (1MDB lawyer), he said, adding that Jho Low had also instructed him to not interfere with the foreign funds.

He said he often met with Datuk Azlin Alias (now deceased), who was then Najib’s principal private secretary, to tell him of his concerns and intention to resign.

“I also sent an email to Azmi Tahir (Chief Financial Officer of 1MDB) informing him of my concerns about the unreasonable plans made by Jho Low for 1MDB as early as September 2013.

“I also expressed my intention to resign to Azmi Tahir,” he added.

 The witness also said that 1MDB’s management worked hard to prepare the prospectus for the listing (IPO) of its subsidiary, 1MDB Energy Group, on the stock exchange – Bursa Malaysia.

However, he said, it could not be listed on Bursa Malaysia due to, among other factors, the negative views given by some media such as The Edge and Kinibiz on 1MDB and that this had given a negative perception to investors.

Mohd Hazem said Azlin always advised him to resign after the listing of 1MDB Energy on Bursa Malaysia.

“But, at the end of October 2014, after I returned from performing the Haj, I mentioned to Jho Low and Datuk Azlin Alias that I was serious about resigning as the CEO of 1MDB,” he added.

Mohd Hazem said he also told Datuk Azlin to tell Jho Low to find the candidate to replace him because none of his subordinates wanted to replace him.

He said than on Jan 3, 2015, upon his return from a holiday, Azlin informed him that they had found a candidate for the post of assistant CEO and that he was asked to hold the CEO post until Edra Energy’s listing on Bursa Saham in mid 2015.

“On Jan 5, 2015, Arul Kanda came to report as 1MDB president, which meant that as the CEO, I should report to him. At that time, I also thought that it was the appropriate time to resign as the post of president is similar to CEO,” he added.

Najib, 67, is facing four charges of using his position to obtain bribes amounting to RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The hearing before judge Collin Lawrence Sequerah continues on Oct 5.