Kuala Lumpur: Zeti Akhtar Aziz told Najib Razak’s 1MDB trial that it took Bank Negara Malaysia (BNM) seven years to discover that a large portion of 1MDB funds had gone into an account controlled by Low Taek Jho, or Jho Low.
The former central bank governor said that “it takes several years to detect” such international transactions.
She also denied that the time taken to make the discovery was unduly long.
In 2009, 1MDB entered into a joint venture with PetroSaudi International (PSI), which required the company to inject US$1 billion in capital.
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It later emerged that the balance sum of US$700 million went into an account held by Jho Low’s company, Good Star Limited, in a private bank, RBS Coutts.
Explaining how the transaction was detected, Zeti said: “It was a cumulative effort with regulators from all over the world, along with BNM’s internal investigations through the International Transactions Information System (ITIS) and Swift code.”
She said the investigation was initiated after 1MDB failed to furnish information to sufficiently explain the transaction.
Zeti told the court that BNM had in 2013 also investigated Deutsche Bank Bhd over a foreign funds transfer involving 1MDB, but that no action was taken against the bank.
“1MDB submitted wrong information. Deutsche Bank asked 1MDB follow-up questions but all they got was a reply that it (Good Star) was a PSI subsidiary,” she added.
Zeti said that it was the duty of banks to conduct their due diligence and report transactions into the online banking system before sending out the funds.
“The daily turnover of foreign remittance (in Malaysia at the time) was US$12 billion. BNM also cannot undertake to conduct due diligence against an individual’s account.
“BNM is (not) responsible because it is not our duty under the law,” she added.
Najib is standing trial on 25 charges of abuse of power and money laundering of funds amounting to over RM2.28 billion, allegedly belonging to 1MDB, that were deposited into his AmBank accounts between February 2011 and December 2014.
The hearing before Justice Collin Lawrence Sequerah continues.
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