Ex-1MDB CEO insisted on PetroSaudi deal despite warnings, court hears

New Straits Times

22-04-2025

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PUTRAJAYA: Former 1Malaysia Development Bhd (1MDB) chief executive officer Datuk Shahrol Azral Ibrahim Halmi was insistent on finalising a joint venture agreement (JVA) with PetroSaudi International Ltd (PSI), the High Court heard.
A former partner at law firm Wong & Partners, Brian Chia Hock Gee said Shahrol was pushing to ensure 1MDB could sign the agreement with PSI on Sept 28, 2009.
He said the firm had provided legal advice to the sovereign wealth fund on Sept 16, 2009, to facilitate the execution of the US$1 billion joint venture deal.
Chia said this when testifying in Datuk Seri Najib Razak's corruption trial for misappropriating billions of 1MDB funds before presiding judge Datuk Collin Lawrence Sequerah today.
When asked by deputy public prosecutor Ahmad Akram Gharib whether he was aware that Shahrol was acting on instructions from higher-ups, Chia replied in the negative.
He said all matters involving fund management including dealings with Bank Negara Malaysia (BNM) were handled by Shahrol and former 1MDB executive director Casey Tang Keng Chee.
"Wong & Partners had no role in the payment. We did not manage any funds or handle transactions with the banks involved," he said.
Chia, who also headed the firm's corporate and commercial securities practice, added that the firm had no involvement in the transfer of the US$1 billion for the JVA.
He said he was only informed that US$700 million had been transferred to a PSI nominee account, while the remaining US$300 million was deposited into the 1MDB-PSI joint venture account.
The witness confirmed that he had prepared a legal memorandum outlining the risks involved in entering the joint venture.
"I gave my advice, and they decided to proceed on the basis that this was a government-to-government (G2G) investment.
"It was not for me to question the arrangement... I had advised them and warned of the risks," he said.
Under the agreement, 1MDB was to inject US$1 billion in equity, while PSI would contribute assets valued at US$1.5 billion.
However, the transfer of funds was split on 1MDB's instructions, with only US$300 million transferred to the joint venture company, while US$700 million was remitted to Good Star Ltd — a company linked to fugitive businessman Low Taek Jho, or Jho Low.
Najib faces four charges of using his position to obtain RM2.3 billion in bribes from 1MDB funds, and 21 charges of money laundering involving the same amount.
The trial continues.