Husni: Najib wanted 1MDB to be under PM Dept’s supervision, unlike other Finance Ministry-owned firms

KUALA LUMPUR, June 7 – It was then Prime Minister Datuk Seri Najib Razak who had wanted the Ministry of Finance-owned 1Malaysia Development Berhad (1MDB) to come under the supervision of the Prime Minister’s Department, former Minister of Finance II Datuk Shmad Husni Mohamad Hanadzlah said in court today.

As the Minister of Finance II from April 2009 until his voluntary resignation in June 2016, Husni today confirmed in the High Court several government documents such as past Cabinet meeting minutes and documents presented to the Cabinet and finance ministry documents.

For example, Husni Verified a March 19, 2010 memo by the Treasury secretary-general to then finance minister Najib for the latter’s approval, confirming that this note was done through Husni himself as the finance minister II.

In this memo titled “1Malaysia Development Berhad: Proposal to be given for supervision by the Prime Minister’s Department”, Husni confirmed there was a handwritten note by him to say “I support the recommendation”, but said this was what Najib wanted.

“I confirm that the proposal to give the supervision of 1MDB to the Prime Minister’s Department was prepared on the wishes of the prime minister, namely Datuk Seri Najib,” he said while testing the 20th Prosecution witness in Najib’s trial over the misappropriation of more than RM2 billion of 1MDB funds.

“I also wish to the state, in the other MOF Inc companies that were formed, there has never been a MOF Inc companies that were given to be Supervised by the Prime Minister’s Department such as this 1MDB. Datuk Seri Najib did not further tell me why 1MDB has to be Supervised by the PM’s Department. “

1MDB had started out as the Terengganu state government-owned Terengganu Investment Authority (TIA) Berhad, but was later acquired by the federal government to be fully owned by the Ministry of Finance’s Minister of Finance Incorporated (MOF Inc) and was then Renamed in September 2009 to be 1MDB.

Datuk Seri Ahmad Husni Hanadzlah was Minister of Finance II from April 2009 until his voluntary resignation in June 2016. - Picture by Firdaus Latif

Datuk Seri Ahmad Husni Hanadzlah was Minister of Finance II from April 2009 until his voluntary resignation in June 2016. – Picture by Firdaus Latif

Husni also said that as far as he knew, none of the other MOF Inc companies under the Ministry of Finance had control on a board of advisers as part of its company structure.

For 1MDB’s company Constitution or its Memorandum and Articles of Association dated August 11, 2009 or before it was formally Renamed from TIA, Husni confirmed that he was not involved in preparing this document as it was under the responsibility of both the company and the MOF Inc division under the Ministry of Finance.

Saying he did not know about the 1MDB company Constitution in detail, Husni also referred to the Article 117 clause in this document, where it laid out what required the prime minister’s written approval first.

Under Article 117, the prime minister’s prior written approval is required for any amendment to 1MDB’s company Constitution, any appointment and removal of directors and senior management team members, as well as any financial commitment including investment, restructuring or any other matter likely to affect the federal government’s guarantee, national interest, national security or any federal government policies.

Earlier, Husni said he had in mid-2009 told then prime minister Najib that 1MDB should not be formed without a feasibility study to evaluate financial risks and ensure that the government would gain from investments, but noted that Najib had said they would continue with the plan.

Husni had also said that he had again voiced his worries to Najib at the end of 2009 about 1MDB’s planned investment via a joint venture with the company PetroSaudi International over fears that the investment would be lost, but said Najib had said “Husni, I don ‘t want you to get involved and interface about 1MDB. ” Following that meeting with Najib at the end of 2009, Husni said he was not involved at all in any 1MDB decisions and was not told about any investments by 1MDB.

Husni also said he had in a personal letter dated August 23, 2010 written to Najib as the then prime minister and gave the letter to the prime minister’s then principal private secretary Datuk Azlin Alias ​​to be given to Najib.

“In this letter, it is clear that I felt worried over 1MDB affairs that could attract controversy and affect the government and the prime minister. But after this letter was submitted, I did not receive any feedback from Datuk Seri Najib about my worries, ”he said, adding that he felt he had fulfilled his responsibility as Minister of Finance II then to speak out at 1MDB.

Saying he was no longer involved in 1MDB after receiving the “order” from Najib to not be involved or interfere in the company’s affairs, Husni however said that Najib had in early 2015 asked him for his help to solve the problem of 1MDB which was said to be Laden with heavy debts.

Husni said he had disagreed and told Najib that this task should be carried out by a minister in the Prime Minister’s Department, as he was never involved in and was not given any reports about 1MDB matters.

“But Datuk Seri Najib had insisted that I carry out that task and I later met with the Minister in the Prime Minister’s Department which is Datuk Seri Wahid Omar for him to take over that task, but he also did not agree,” he said.

Husni then said he and his own principal private secretary Imran Yasin Mohd Yusof then drafted a plan known as the 1MDB rationalization plan, with the plan’s implementation to be carried out by 1MDB’s management.

Husni’s main tasks were then to obtain information related to 1MDB, its financial position, assets, list of current liabilities and investment matters.

While preparing the 1MDB rationalization plan as ordered by Najib, Husni said he and Imran Yassin had received information that 1MDB’s board of directors did not have powers over the company’s investments but that this was under the 1MDB’s board of advisers. As the prime minister, Najib was the chairman of the 1MDB board of Advisers.

“I was also informed that the prime minister had full powers in making any company decisions,” he said.

Noting that the prime minister had directed him in finding solutions to the problem of 1MDB which was facing excessively high debt levels, Husni said he had obtained 1MDB’s audited financial statements and financial statements and found that 1MDB owed RM48.571 billion in debts to various loan providers as of May 20, 2015.

Having also found 1MDB at that time to have assets worth RM49.895 billion, and that the 1MDB rationalization plan had given the company two options of either liquidating all its assets to obtain a RM3.3 billion profit, or to monetize all assets – except for some Equities in Edra, Tun Razak Exchange and Bandar Malaysia – that would then be able to reduce the debt to RM5.3 billion.

Husni said he had presented this 1MDB rationalization plan in a Cabinet meeting in early 2015 and that the second option in the plan was approved.

But he said the Cabinet later decided that this rationalization plan did not fall under the government’s responsibility.

As such, the prior Cabinet approval would be converted to be labeled as a notification to the Cabinet and that the rationalization plan had to be presented to 1MDB for its further action.

Husni said he had wanted to stay on as finance minister II to manage the 1MDB rationalization plan, but said that Najib had wanted him to manage on other Ministries and that he then voluntarily decided on June 27, 2016 to quit from his Ministerial position.

“As the decision to transfer me to other Ministries contradicted my stand to continue staying in the 1MDB rationalization plan, I voluntarily resigned and this was agreed by the prime minister of Malaysia then,” he said.

Najib’s 1MDB trial before High Court judge Datuk Collin Lawrence Sequerah resumes Tomorrow.

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