A leaked witness statement, made by the former 1MDB chairman, Bakke Salleh, to Swiss prosecutors in January of last year, has provided yet further evidence that Prime Minister Najib Razak exercised “supreme” control over the fund and was wholly complicit in the theft of billions of ringgit from its first joint venture with the front company PetroSaudi.
Explaining the structure of the fund the businessman, who had been asked to volunteer his services as a board director for the public good, said that 1MDB management (namely CEO Shahrol Halmi) had explained the structure of the company at a first board meeting on September 26th 2009, saying that unusually and outside the norm, the “supreme power” lay with the Prime Minister:
We had a Board Of Directors, and above it a “Board of Advisors” advisory committee. The chairman of this committee, was the Prime Minister of Malaysia. Some well-known names have been mentioned as invited to be members of this Board of Advisors. However, the statutes of 1MDB made it very clear that the final power to make investment decisions as well as to appoint key persons, at the level of the Board of Directors as well as Senior Management, rested with the Prime Minister of Malaysia…
If we look at the statutes, the “constitution” of 1MDB, the supreme power belongs to the Prime Minister… in the statutes there is mention of a Board of Advisors but there was none in fact. To answer your question, according to the statutes of 1MDB, he [The PM] was the supreme authority for all investment decisions as well as for appointments, not only to appoint board members but also key members of management…
In 1MDB, the Prime Minister gave orders that the command line should be Prime Minister – Board of Directors – Management. Normally, the shareholder does not go directly to the Management. But 1MDB was not normal, because the power of the chairman of the Board of Advisors, or the Prime Minister, was superior to other powers… in 1MDB, the Prime Minister has given directions to Management without passing through the Board of Directors.
[Bakke Salleh; translation from French translation of his testimony 29th Jan 2019]
Salleh goes on to detail how Najib intervened in several material ways, against the advice of the company’s increasingly concerned directors, to ensure that a staggering $700 million from 1MDB’s first billion dollar investment was speedily transferred into a separate bank account controlled not by 1MDB, or even its supposed ‘joint venture partner’ PetroSaudi but by Jho Low, who was acting as Najib’s unofficial agent and sitting in on board meetings at the fund.
When Salleh attempted to personally text Najib about his concerns that the vast transfers were made without proper checks and against the orders from the board, he says the PM simply did not reply. It made him realise that Najib was “in the loop” over the thefts and he therefore decided to resign.
The witness statement is packed with further explosive testimony that is likely to be aired more fully when Bakke Salleh is called to give evidence at Najib’s own 1MDB trial in Malaysia.
Astonishingly, it was uploaded onto the internet briefly on Wednesday as part of an apparent ‘Black Ops’/ negative PR campaign launched by PetroSaudi against the whistleblower Xavier Justo, a former director of the company.
The attack website claims to expose Justo and paints his former colleagues (who orchestrated Justo’s imprisonment in Thailand for 18 months) as the victims of his data dump. A related site named ‘1MDB Leaks’ advertises “never before seen leaked documents behind the 1MDB scandal”.
Yet, within a short period, this particular French language document featuring the questioning of Bakke Salleh by Swiss prosecutors and PetroSaudi’s own lawyers was hastily removed. The likely reason for that withdrawal is that only the Swiss authorities and PetroSaudi and its lawyers had access to the legally sensitive material, which ought not to have been made public.
In the run up to these developments, Justo says he was approached and befriended by a Canadian, who purported to be part of an ‘investigative journalism’ website and interested in writing about his story. “I have nothing to hide and was frustrated at the slow pace of the investigation against those who put me in jail for exposing 1MDB”, he told Sarawak Report.
The whistleblower says he cooperated with the ‘writer’ and provided extensive documents he had collected on 1MDB and also confided frustrations about the lack of apparent progress in the criminal case opened against the two PetroSaudi directors, Tarek Obaid and Patrick Mahony.
After a number of discussions, Justo says he eventually became aware that the purpose of the ‘investigation’ was to turn the information against him rather than highlight the ongoing criminal cases against PetroSaudi.
In fact, progress is now being made on the Swiss case against Patrick Mahony and Tarek Obaid, which began in 2018, and the hearings are due to continue shortly. The court will receive testimony from Justo himself, who suspects this defamation site against him by the Canadian blogger ‘Justin Chambers‘ (Justo doubts it is his real identity) is aimed at undermining him in advance.
“Their story is full of untruths and links to a domain that claims to be my own website but actually attacks me” says Justo, who found himself bizarrely accused of being involved in a Spanish drugs cartel, even though the accompanying court papers (supplied as evidence) make no reference to him.
As part of the extensive series of attacks under the title of “Whistleblower or Criminal?” (later altered to “Whistleblower or Pawn”) the campaign links to a page named 1MDB leaks that promises NEVER BEFORE SEEN DOCUMENTS BEHIND THE 1MBD SCANDAL
Most of the documents have already been widely circulated and some were supplied by Justo (against whom the ‘journalists’ promise further attacks based on their deceptive phone interviews).
However, the very first document on the list was indeed significant and new, namely this confidential witness statement from Bakke Salleh.
Within a short few hours this document was taken down, but not before observers had captured it. Sloppily, those behind the “1MDB leaks.com” section of the network of interlinked websites FAILED to cover up the removal of the uber-sensitive document by leaving a gaping hole.
The top document on the list continued to remain labelled as ‘No 2.’ thus betraying the removal of document Number 1 !
Here is the document No 1. that was removed.
The reason for the hurried removal seems evident, given the witness statement was highly restricted. Being the defendants in the case, Tarek Obaid and Patrick Mahony, together with their lawyers, were allowed to attend the proceedings and receive the transcripts that are not publicly available.
It leads to an inescapable conclusion that those behind the attack website and those who provided this sensitive document to its authors material were indeed linked to PetroSaudi, whose lawyers may have advised about the dangers of releasing such privileged information in the middle of their court case.
The 1MDB ex-Chair was testifying in the criminal case brought by the Swiss authorities against Tarek Obaid and Patrick Mahony, who are also cited in the asset seizure case by the US against thefts from 1MDB and in a new Malaysian case seeking the return of money diverted from 1MDB.
Bakke Salleh is reminded at the start of his evidence of the charges faced by the defendants:
“You are heard today in the context of the criminal proceedings against Tarek Essam OBAID and Patrick Andrew Marc MAHONY“.
Against Tarek Essam OBAID for suspicion of unfair management (art. 158 para. 2 CP), fraud by profession (art. 146 para. 1 and 2 CP), active bribery of public officials abroad (322septies para. 1 CP) ), forgery of documents (251 PC), aggravated money laundering (305bis al. 1 and 2 PC) unfair management of public interests (art. 314 PC). and against Patrick Andrew Marc MAHONY for suspicion of unfair management (art. 158 al. 2 CP), fraud by profession (art. 146 al. 1 and 2 CP), active bribery of public officials abroad (322septies al. 1 CP), aggravated money laundering (305bis al. 1 and 2 CP) and unfair public interest (art. 314 PC)
So much for drummed up stories against Xavier Justo, whose only role is as a witness to the proceedings. Justo told Sarawak Report that he believes these latest attacks against his character were commissioned by the PetroSaudi directors for that reason.
The company is presently seeking to claim hundreds of millions of dollars which have been frozen – the proceeds of operations in Venezuela where they invested the 1MDB loot in a series of fraudulent oil projects, without paying a penny back to their ‘joint venture partner’.
The defendants may now regret their underhand attack on Justo, given the exposure of their actions bang in the middle of the resumption of the hearings.
Meanwhile, Bakke Salleh’s testimony heaps further damning information about Najib.
Salleh explains he was brought in on the project at first when it was the Terengganu Investment Authority, thanks to a direct approach from Jho Low.
“I was contacted by Mr. Taek Jho LOW who told me that the King of Malaysia was interested in establishing a sovereign fund for the State of Terenganu. I was asked to help them in this establishment by being a member of the “Steering committee”
When the King of Malaysia withdrew he resigned but was then again approached to be a director of the re-named 1MDB:
I was re-appointed as director of TIA and subsequently the name of TIA was changed to 1MDB… it was the first Minister of Malaysia, also Minister of Finance who re-appointed me, because this entity was then the exclusive property of the Ministry of Finance. Let me specify that the Minister of Finance was Najib RAZAK, also Prime Minister…
Q: Can you tell us in what capacity Taek Jho LOW contacted you? He acted as an intermediary for the King of Malaysia and also on behalf of the Prime Minister, Najib RAZAK. I met him on several occasions in the office of Najib RAZAK, already when he was Deputy Prime Minister as well as Minister of Defense, Najib RAZAK did not became Prime Minister till April 2009. I met Taek Jho LOW in 2008 and at the beginning of 2009, he was also the one who accompanied the king to his Palace to introduce me to the king at the tea reception. On question from the prosecutor, neither Najib RAZAK nor the king ever told me directly that Taek Jho LOW represented them, but Najib RAZAK asked me to help Taek Jho LOW and his work.”
Salleh then explains the connections with PetroSaudi and the so-called ‘government to government’ undertaking with what was in fact a private shell company part-owned by the King of Saudia Arabia’s son, together with Tarek Obaid.
September 18, 2009 the management explained that there was a proposal by the Saudi government, in which a company called PETROSAUDI which was controlled by the son of King Abdul lah of Saudi Arabia, Prince TURKI, who would work with 1MDB to develop oil concessions in Turkmenistan as well as in Argentina.
1MDB would receive a 40% stake in the capital of the Joint Venture, 60% would be held by PETROSAUDI. The valuation of oil assets and concessions was higher than the amount 1MDB had to invest.
It was about investing in a business where the capital value was greater than the investment made. It was explained that this was a Joint Venture at government level (“G to G”) and that this would strengthen bilateral relations…. From the outset, the Saudi government intended to help 1MDB by giving it this opportunity.
It was the Management who gave these indications, of which the managing director was SHAHROL HALMI and the business development was Casey TANG. To answer your question, they worked with Taek Jho LOW and the PETROSAUDI management, that’s why they had these indications.. they said that they spoke with Taek Jho LOW and Taek Jho LOW acted as an intermediary to get information from PETROSAUDI and provided it to Management, and Management itself had contacts with PETROSAUDI. At the time, they mentioned two names: Tarek OBAID and Patrick MAHONY, as directors of PETROSAUDI. We never met them, we only heard that from Management,
What becomes critical in the unfolding evidence however is Salleh’s explanation as to how Jho Low and Najib worked together to push through the payment of 1MDB’s first billion dollars to alleged ‘PetroSaudi’ accounts, before the Board had received trustworthy information it was a genuine company with genuine assets (it wasn’t and the Turkmenistan oil concession was bogus).
September 26 was the meeting where the Board gave its approval to invest in this Joint Venture – but under certain conditions. But before the start of this board meeting, Taek Jho LOW handed me his cell phone telling me that the Prime Minister of Malaysia wanted to talk to me, so when the Prime Minister spoke to me, he said this Joint Venture project has been discussed for quite a long time now, I have met representatives of Saudi Arabia, and it would be good for bilateral relations between Saudi Arabia and Malaysia and we need to take a decision on this as soon as possible. He also stated that he looked forward to witnessing the signing of the Joint Venture as soon as possible, and that he had been informed that either King Abdullah or Crown Prince SALMAN will be present at the signing of the Joint Venture. Joint Venture. These were the words of the Prime Minister and the Board had to make the decision quickly. Immediately after the end of my conversation with the Prime Minister, it was before the board meeting, I told the other board members that I had just spoken to the prime minister, and that he wanted us to take it quickly. a decision. So this has been mentioned to other Directors.
Let me specify that I reported to the Board of Directors the entirety of my conversation with the Prime Minister. To answer your question, the Prime Minister told me that he wanted the Board to take a decision quickly, but he did not give a precise date. He said he wanted to witness the signing by the end of the month; it was September 26, 2009, so when he spoke of the end of the month, it meant the end of September…..
It was SHAHROL pushing, but the other directors were asking why he was in such a hurry. But when the Prime Minister spoke to me, it brought a new perspective to the situation. He said this has been going on for a long time, that he has met the other side, that it is good for “G to G” relations, when the board has to make a decision quickly, that he is happy to sign the agreement. It was the Prime Minister who created the emergency because otherwise it would be embarrassing for the government of Malaysia..”
Separately, Bakke Salleh told the Swiss that whilst the board expected and required that the investment to be channeled into a joint company with 1MDB board holding equal control of the accounts:
“Q: “Without the Prime Minister’s appeal, would you have authorized the transaction on September 26, 2009? No, we would not have approved, we would have gone through a normal evaluation period. But here, the difference is that we gave our approval but we attached it to four conditions. As long as these four conditions were not met, the money should not be touched. By giving this approval, we have conveyed the message to PETROSAUDI that we are acting in good faith….
The last condition [of the Board] was the USD 1 billion investment of 1MDB must be credited to the bank account of the Joint Venture company and the name of the Joint Venture company is 1MDB PETROSAUDI Limited. No withdrawal of this money could take place without the approval of the Board. The instruction was that the money had to go to the account of the Joint Venture company and that this money could not be touched until the board was formed.
To the contrary, the Board learnt on October 3rd that the management simply signed a ‘loan repayment’ agreement with PetroSaudi and then sent the money to a company named Good Star in the Seychelles, allegedly belonging to PetroSaudi but in fact owned by Jho Low.
When the directors expressed shock Najib kept silent, says Bakke Salleh:
“At the meeting on October 3, the Management informed us that it had signed an agreement with PETRO SAUDI and they had already divided the US $ 1 billion into two tranches. When they said this, we said: who gave you the authorization to divide the USD 1 billion? They transferred USD 700 million on PETROSAUDI account and USD 300 million was created on 1MDB-PETROSAUDI account. We were all shocked and disappointed, we asked why you did that and the managing director’s response was that they had been advised to do so.
At the end of this October 3 meeting, I told the other Directors, but not in the presence of the Managing Director or the other members of Management, I told them we should all resign. But I realized then that I should not resign immediately, because I had to make sure that the minutes reflected what had happened, that all of the Council’s instructions were clearly reflected in the minutes, so I conducted a new meeting on October 10, so the minutes for the meetings on September 26 and October 3 have my initials on every page.
I would also like to add that after the meeting of October 3 I sent an SMS to the Prime Minister and I explained to him what had happened, and that the money was divided and that the Board did not was not comfortable. I did not receive a response from the Prime Minister, I told myself after a few days that I was going to resign, so I submitted my resignation on October 19th.
Q: from Mr. Maurice Harari PetroSaudi lawyer: Did you indicate the reasons in your letter of resignation, if so which ones? I did not mention the real reason because the letter was addressed to the Prime Minister. When I made my decision to resign, I knew the Prime Minister was aware of what was happening, because he never answered my text message. As long as he didn’t respond to my text message, I knew he was in the loop.
The former Chairman then reiterated his clear conclusion that Najib knew all about what had happened and sanctioned it:
“My letter of resignation was brought by my secretary to the Prime Minister. After I resigned, the Prime Minister never spoke to me, never mentioned 1MDB. I would like to point out that I continued thereafter to meet regularly with the Prime Minister within the framework of other activities that I carried out for [other] the state company [he worked for].”
The Swiss lawyers persisted against the witness, asking why as Chairman of the Board he did not take action against the rogue management at 1MDB which had disobeyed the Board instructions:
Q: In your capacity as Chairman of the Board, on October 3, 2009, and October 10, did you propose that sanctions be pronounced against the members of the Management, who apparently did not respect the conditions set? At that time we did not discuss this, because we were shocked at what had happened. On October 3 I sent the SMS to the Prime Minister, and not having received a response, I knew the Prime Minister was aware of all this. The fact of taking steps, measures against the Management would not be easy because the final power concerning the appointment of the management direction and the key people of the company remained in the hands of the Prime Minister. The Board never discussed what action to take, because we knew the Prime Minister was giving instructions. The correct thing to do was to resign.
He went on:
Another Board member resigned in January 2010. This is TAN SRI AZLAN ZAINON. TAN SRI told me that it doesn’t look good for the Prime Minister if we both quit at the same time. This would embarrass the Malaysian Prime Minister. So he decided to quit in January. To answer your question, I know that he did not mention the real reasons for his resignation to the Prime Minister. You know the culture, you will understand the difficulty of exposing to the Prime Minister the reasons for resigning.
Q: Why did the other Board members not follow you? One of them had worked for the Malaysian Prime Minister for over thirty years, there was a very strong sense of loyalty. This is TAN SRI LODIN WOK. And the other was a much younger person, and he told me he was worried about the impact it would have on the rest of his career if he had to quit.
In his final remarks, Bakke Salleh also confirmed recent testimony by CEO Shahrol Halmi that throughout he had personally acted on the instructions of Najib on all these matters and had told him so after the scandal broke:
Q: Why did SHAHROL and CASEY keep their positions when they had acted without regard to the instructions of the Board? They knew they had the support of the Prime Minister. After our resignation, we learned that SHAHROL was taking his instructions not only from Taek Jho LOW but also from the Prime Minister. To answer your question, I know because SHAHROL told me, when this came to light in 2014-2015, I had a meeting with SHAHROL and at that time he told me he had received instruction from the Malaysian Prime Minister.
So, in their attempt to once more attack, vilify and incriminate the whistleblower in this case, it appears PetroSaudi have once again hired operatives who have done more harm than good to their lying cause.
The Carole Garnier and Justin Chambers website is sadly ill-written with basic language errors from the very start.
In the past PetroSaudi have afforded more polished operators, such as PGI and David Scholberg and Marc Comina – all likewise exposed by Sarawak Report.
The company still has access to stolen millions to hire a better product. However, it is possible wiser heads have kept away.
Meanwhile, it seems PetroSaudi never learn – the truth will out and Black Ops get caught.
The ‘Carole & Justin Chambers‘ site, which in turn links its material to a catch-all super-site for blogging conspiracists called “Whole Truths” and also the so-called “1MDB.leaks.com” claims to represent:
a group of concerned individuals from Europe and Asia who have been following these events for many years and have grown increasingly concerned that this “whistleblower” and those who have aided and abetted him will inflict far more damage and misery than anything he supposedly uncovered…..”
Clearly they are in fact being paid to put out their product by PetroSaudi who have indeed every reason to be concerned as the net closes in.