See More on Facebook

Economics

1MDB a fool to have paid US$1bil (RM4.18bil) for 1MDB-PSI joint venture

The corruption trial over the sovereign wealth fund continues in Malaysia.


Written by

Updated: October 25, 2019

1Malaysia Development Berhad (1MDB) was a fool to have paid US$1bil (RM4.18bil) to obtain a 40% stake in the 1MDB and Petro Saudi Holdings (Cayman) Ltd joint venture (JV), while PetroSaudi International Ltd (PSI) only injected US$108mil (RM452mil) to get a 60% share, the High Court heard on Thursday (Oct 24).

Former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi agreed to this suggestion by defence lead counsel Tan Sri Muhammad Shafee Abdullah when queried at the 1MDB trial of former prime minister Datuk Seri Najib Razak.

Petro Saudi Holdings (Cayman) Ltd was a subsidiary of PSI.

Shahrol Azral said the asset value which was meant to compensate the JV value was revealed in a valuation report by American energy economist Edward L. Morse, as well as legal opinion from the 1MDB legal team, Brian Chia from Wong & Partners, presented at the 1MDB board meeting on Oct 10,2009.

The oil and gas assets purportedly owned by PSI, were located in Argentina and Turkmenistan and were valued by Morse’s firm at US$3.625bil (RM15.17 billion).

Shahrol Azral said he signed the engagement letter regarding the JV on behalf of 1MDB, but could not recall who signed for PSI.

Muhammad Shafee: The benchmark of the Argentinian asset was at US$108,109,651 (RM452mil). Do you remember what was the make-up for Turkmenistan asset?

Shahrol Azral: US$3.518bil (RM14.72bil).

Muhammad Shafee: So US$3.5bil (RM14.72bil), a mere US$108mil (RM452mil) is the Argentinian asset value.

Shahrol Azral: Yes.

Muhammad Shafee: You know the Turkmenistan asset subsequently proven was not PSI’s?

Shahrol Azral: I don’t remember.

Muhammad Shafee then referred the witness to a media report, which stated that the assets in Turkmenistan were owned by Buried Hill Energy (Cyprus) Co Ltd.

According to the counsel, the publication had obtained the rights to all the documents stolen from PSI by former PSI executive Xavier Andre Justo before he fled to Bangkok, Thailand.

Muhammad Shafee: You agree with me, if Turkmenistan asset was swiped under our feet, if it was not an asset of PSI, 1MDB needed to inject only US$108mil (RM452mil) to match the Argentinian assets.

Shahrol Azral: Correct.

Muhammad Shafee: Interesting, because we look like fools. 1MDB looked like fools. 1MDB, like fools, put in US$1bil (RM4.18bil) for 40%. They (PSI) only put in US$108mil (RM452mil) and took 60%.

Shahrol Azral: Correct.

Earlier, Shahrol Azral agreed to a suggestion by the counsel that he did not inform the board of directors of 1MDB upon learning about the true ownership of PSI’s Turkmenistan asset.

Muhammad Shafee: At some point, a long time ago, you found out that it was not their asset.

Shahrol Azral: Not a long time ago, it was in 2015… I was still on the board.

Muhammad Shafee: When you found out, did you take the matter to the board?

Shahrol Azral: No.

Shahrol Azral added that the board, which was chaired by Tan Sri Lodin Wok Kamaruddin at that time, was not even alerted about such important information.

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

The hearing before Judge Collin Lawrence Sequerah continues on Tuesday (Oct 29).



Enjoyed this story? Share it.


The Star
About the Author: The Star is an English-language newspaper based in Petaling Jaya, Malaysia.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

China-US trade deal bullish news for both countries, rest of world

From Chinese state media. State Councilor and Foreign Minister Wang Yi said Saturday that the China-US deal on the text of a phase-one economic and trade agreement serves as bullish news for both countries and the rest of the world. Speaking at a joint press conference with Slovenian Deputy Prime Minister and Foreign Minister Miro Cerar, Wang said China has, as always, been opposed to settling economic and trade disputes by imposing tariffs as there is no winner in a trade war. China has also rejected the use of unilateral pressure as it violates the rules of the World Trade Organization (WTO), said Wang. He pointed out that following rounds of back-and-forth negotiations, China and the United States have agreed on the wording of a phase-one economic and trade agreement, and the US side has promised to phase out additional tariffs on Chinese products. The agreement demonstrates the spirit


By Esther Ng
December 16, 2019

Economics

China, US in constant touch to resolve trade issues

China and the United States are in constant touch to resolve pending trade and economic issues, the Ministry of Commerce said on Thursday. The comment came ahead of Sunday’s US deadline for another scheduled round of tariff increases on Chinese imports worth almost $160 billion. If a trade deal is not struck by Sunday, computer monitors and toys will be among the Chinese export items likely to be affected. Gao Feng, a ministry spokesman, said the Customs Tariff Commission of the State Council has already worked out tariff exemptions on some soybean, pork and other products shipped from the US — the latest sign of tensions easing in the protracted trade conflict. The US seems to resort to brinkmanship by using a tariff deadline to pressure China in the ongoing trade talks for a phase one, preliminary deal, said Chen Wenling, chief economist at the China Center for International Economic Exchanges


By Esther Ng
December 13, 2019

Economics

Report: US officials lied about Afghanistan

Civilian, military officials misled public for nearly two decades about status of war, Washington Post review of documents finds. For nearly two decades, senior US civilian and military officials didn’t tell the truth about the war in Afghanistan, The Washington Post reported on Monday after reviewing more than 2,000 pages of government documents. The officials made pronouncements they knew to be false and hid evidence that the war had become unwinnable, the newspaper said interviews with those officials show. John Sopko, the head of the federal agency that conducted the interviews, acknowledged to the Post that the documents show “the American people have constantly been lied to”. The newspaper said that two major claims in the documents are that US officials manipulated statistics to suggest to the American public that the war was being won and that successive


By Esther Ng
December 11, 2019

Economics

7 of 10 Filipinos worried by presence of Chinese workers

China has increased its presence in the archipelago. The rising presence of Chinese workers in the country worry seven out of 10 adult Filipinos, according to the latest Social Weather Stations (SWS) survey, as the government recently launched a crackdown against Philippine offshore gaming operators (Pogos) which mostly employ Chinese nationals. The noncommissioned survey, conducted from Sept. 27 to 30, found that 31 percent “worried a great deal,” while 39 percent are “somewhat worried.” Highest in Metro Manila The proportion of those who were worried about the increasing number of Chinese workers in the country was highest in Metro Manila at 75 percent, followed by the Visayas at 71 percent, Luzon outside Metro Manila (69 percent) and Mindanao (67 percent.) About half of the respondents agree that the rising number of Chinese workers is a threat to national secur


By Philippine Daily Inquirer
December 6, 2019

Economics

Pakistan to launch Digital Pakistan Vision

Imran hopes to unleash ‘potential of youth and women’ with new venture. Prime Minister Imran Khan on Thursday said that with the introduction of the ‘Digital Pakistan Vision’, the full potential of the contribution of youth and the women to the economy will be unleashed. According to a press release from the Prime Minister Office: “The Vision sets Pakistan’s digital ambition and has been designed for the government and the private sector to work towards a digitally progressive and inclusive Pakistan.” Speaking at the launch ceremony of the initiative, the prime minister regretted not having launched it at the very beginning when his government was formed. “I should have given attention to Digital Pakistan earlier. This is the most important thing for Pakistan right now, especially its youth. The whole world is moving forward digitally and we have been l


By Asia News Network
December 6, 2019

Economics

Thailand looks to become LNG hub

Energy Minister Sontirat Songtijirawong declared at a conference. The Energy Policy Administration Committee today (December 4) acknowledged the guidelines for turning Thailand into the regional trading hub of liquefied natural gas (LNG). The guidelines came about from a study assigned by the government-appointed energy reform committee to PTT. Energy Minister Sontirat Songtijirawong said that the move was estimated to generate Bt165 billion for Thailand’s economy between 2020 and 2030. The country is expected to start full commercial trading late next year or early in 2021. Thailand has potential to become the regional hub due to its high demand of LNG and its geographical location as the centre of countries with high LNG demand, namely China, India, Japan, Cambodia, and Vietnam. Moreover, Thailand has a supportive infrastructure to serve regional LNG tradi


By The Nation (Thailand)
December 5, 2019