1MDB board unaware US$1b split payment meant for JV company

Former 1MDB CEO Shahrol Azral Ibrahim Halmis conceded during cross-examination the 1MDB board was not informed about a decision to split a US$1 billion by 1MDB meant for the 1MDB-Petrosaudi joint-venture company (JVC) into US$300 million and US$700 million.

The board had authorised one lump sum to be paid only to the JV company and in return receive one billion shares.

When asked by ex-PM Najib Razak’s lead counsel Shafee Abdullah who decided to split it contrary to the board’s decision, Shahrol said he agreed to the split on the assumption it was ok and given the fact that alleged Jho (Low) was in close contact with Najib.

“During the (Sept) 26 (1MDB) board meeting, at that time, my frame of mind was, this is something that needs to be done and everything is in order,” he said.

Shahrol told the court the then 1MDB chief financial officer Casey Tang advised him this was alright and “we will inform the board afterwards of the circumstances.

The High Court was also told the bigger portion, the US$700 million actually went to Good Star Ltd, a company owned by Jho Low.

The ex-CEO however,  said the BOD’s consent was not obtained before the split due to time constraints and the ‘need to get things done’.

The whole episode about the split of the US$1 billion came after Casey brought a document signed by PSI co-founder and CEO, Tarek Obaid to amend some clauses in the JV agreement.

Shahrol said some amendments include changing the JV bank account from Banca Della Svizerra Italiana (BSI) Bank to JP Morgan and the US$700 million will be payable to PSI.

“It was just a matter of how the payment was made to the JV company. Casey convinced me and in good faith, I accepted that it was not reckless, the decision was made based on what I knew and believed at that time,“ he said when pressed by the defence team on why the split was done.