Former Malaysian Prime Minister Datuk Seri Najib Razak has rejected claims that he failed to ensure the legitimacy of PetroSaudi International, the alleged partner in 1Malaysia Development Berhad's (1MDB) controversial $1 billion joint venture deal. Defending himself during the trial, Najib argued that verifying the ownership of PetroSaudi was not within his responsibilities as the prime minister.
The trial focuses on allegations that $2 billion of 1MDB funds were transferred into Najib's personal bank accounts. When questioned by prosecutors, Najib admitted he did not personally verify PetroSaudi’s purported ties to the Saudi royal family. He argued that such checks were the duty of the 1MDB board and their legal advisors, Wong & Partners. Najib said it was unreasonable to hold him accountable for a lapse in due diligence.
“It’s a basic principle in business to verify ownership during a joint venture. This was the responsibility of the lawyers and the board. If they didn’t perform these checks, how can I be blamed for it? As prime minister, I was not involved in such details. It was their job to handle these matters,” Najib stated during his testimony.
Central to the case is fugitive financier Low Taek Jho, also known as Jho Low, who played a significant role in orchestrating the joint venture. Prosecutors pointed to a phone call on September 26, 2009, where Low allegedly convinced Najib to support the PetroSaudi deal, claiming the company represented Saudi King Abdullah’s interests. Najib acknowledged accepting Low’s claims without further verification, citing his belief in fostering strategic ties with Saudi Arabia.
During cross-examination, prosecutors accused Najib of relying too heavily on Low’s assurances and making decisions based on assumptions. Najib countered that he encouraged the 1MDB board to make an informed decision while emphasizing the importance of governance and due diligence. He said, “The board comprised professionals who were responsible for these decisions. My role was to ensure that the proposal was evaluated thoroughly, not to interfere in operational matters.”
Prosecutors suggested that Najib influenced the 1MDB board’s approval of the joint venture by pressuring its then-chairman, Tan Sri Mohd Bakke Salleh, to expedite the process. Najib denied issuing directives, claiming his call to Bakke was meant to highlight the strategic importance of the deal. He said, “I never instructed them to proceed with the deal. I encouraged them to review it carefully and make an informed decision. The responsibility to verify ownership lies with the board and their advisors.”
However, Bakke’s testimony indicated that Najib’s call significantly impacted the board’s decision. Despite this, the board chose not to record the prime minister’s call in its meeting minutes. This omission has raised questions about the level of influence Najib may have exerted over the decision-making process.
The prosecution has also highlighted the diversion of funds intended for the joint venture. While $1 billion was transferred to a joint venture account, a significant portion, including $700 million, was diverted to Good Star Limited, a company linked to Jho Low. Prosecutors allege that $20 million from these misappropriated funds eventually found its way into Najib’s bank account.
Najib maintained he was unaware of any misappropriations at the time, insisting he acted in good faith to promote Malaysia-Saudi relations. He said, “I believed PetroSaudi was owned by King Abdullah’s family. That belief was based on what I was told, and I had no reason to doubt it. If there was a failure in due diligence, that falls on those responsible for overseeing the process.”
When questioned about his reliance on Low, Najib admitted he assumed PetroSaudi’s claims were legitimate but reiterated that his assumptions were based on the information provided by trusted individuals. He added, “At the time, I believed the partnership would benefit Malaysia. I trusted that proper procedures would be followed by the board and their advisors.”
The trial has exposed the magnitude of the 1MDB scandal, which saw billions of dollars misappropriated and funneled into luxury assets worldwide. While Najib denies any wrongdoing, the prosecution argues that his actions, or inactions, enabled one of the largest financial scandals in history. As proceedings continue, questions about accountability and oversight within Malaysia’s highest offices remain at the forefront.
Information Source: Malay Mail
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