1MDB lost US$2.2 billion in dealings with PSI

KUALA LUMPUR: Former 1Malaysia Development Berhad (1MDB) CEO Datuk Shahrol Azral Ibrahim Halmi said the sovereign wealth fund was only paid RM129 million by PetroSaudi International Limited (PSI) although it owed 1MDB a total of US$2.2 billion.

Shahrol Azral, 49, told the High Court here that PSI had only paid the first profit payment back to 1MDB in cash and subsequently never paid a single cent back to 1MDB from the second year onwards.

The ninth prosecution witness was questioned by Datuk Seri Najib Abdul Razak’s lead counsel Tan Sri Muhammad Shafee Abdullah during cross-examination on the 31st day of the former prime minister’s 1MBD trial.

Muhammad Shafee: During the first year for the period of Oct 3, 2010 to Oct 3, 2011, 1MDB would have made millions of profit.

Shahrol Azral: If my memory serves me right, we did. We were paid in cash.

Muhammad Shafee: Are you serious it is in cash?

Shahrol Azral: Yes.

Muhammad Shafee: What about the second payment?

Shahrol Azral: We did not receive any payment from second year onwards. It was capitalised additional indebtedness.

Further pressed by Muhammad Shafee, Shahrol Azral said the total indebtedness of PSI to 1MDB was around US$2.2 billion, including interest as of 2015.

“Some money did come back in the order of magnitude of hundreds of millions, but I am not comfortable to say the figure.

“Some of it was not collectible and repatriated in the low hundreds of millions. Majority were stuck in fund units. By that time, I had left 1MDB management,“ he added.

Shahrol Azral also agreed to a suggestion by the counsel that 1MDB’s association with PSI had caused the strategic resource company to lose a total of US$2.2 billion from the joint venture, Murabaha term notes and subsequent loans.

“At that time in 2010, should we have seen the transaction (with PSI) as suspicious, I agree we could avoid the losses,“ the witness added.

The witness also testified that PSI continued using the ‘1MDB Petrosaudi Ltd’ joint venture name even after PSI no longer had a stake in the company.

Muhammad Shafee was referring to a letter addressed to the former joint-venture company, 1MDB PetroSaudi Ltd, about the approval from 1MDB to borrow US$500 million from Standard Chartered Bank in Labuan.

Quizzed by the counsel on how long and why 1MDB allowed the name to be used by PSI, the witness said he was not aware because “the question just never came up”.

Najib, 66, faces four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The hearing before Judge Collin Lawrence Sequerah continues tomorrow. — Bernama