Ismee said that some time in 2011, then 1MDB chairman Che Lodin Wok Kamaruddin made a request to the management to arrange the London trip, citing that they wanted to meet PetroSaudi’s representatives “face to face”.
“The management then arranged for 1MDB’s directors to fly to London in May, to coincide with Najib’s trip,” he said.
“We met with PSI’s Tarek Obaid and Patrick Mahoney at The Dorchester. Najib also attended this meeting.”
During the meeting, he said, the two sides only discussed “general” and bilateral matters regarding 1MDB’s US$1 billion investment in PetroSaudi.
The court had heard earlier that 1MDB paid US$1 billion in 2009 for a 40% stake in the joint venture while PetroSaudi held the remaining 60%. The funds were later converted into Islamic murabaha notes.
Ismee said that after the meeting at the hotel, they proceeded to PetroSaudi’s office.
“We were satisfied after visiting their office. We felt that PetroSaudi was a ‘genuine’ company.
“The prime minister also sat with us along with Mahoney and Tarek, and this showed us the joint venture was the right decision,” he said.
Not consulted on US$700 million paid to Jho Low’s company
Earlier today, Ismee told the court that a sum of US$700 million from the US$1 billion was transferred to businessman Low Taek Jho’s Good Star Ltd in 2009.
He said the directors were not happy with the management’s decision to move the money to Good Star because they were not consulted.
“We were disappointed with the management team. We did not know that Good Star belonged to Jho Low at that time.
“(Former CEO) Shahrol (Azral Ibrahim Halmi) told us that Good Star was PetroSaudi’s subsidiary company. They should have asked for our permission before moving the money to third parties,” he said.
Ismee also said that Che Lodin was upset over certain terms under the 1MDB-PetroSaudi joint venture agreement.
“Che Lodin said the contract terms were not the same as the ones we had previously approved.
“He said additional and hidden terms had been included without our knowledge,” he said.
He also said the directors were unaware of a move to convert the US$1 billion investment in PetroSaudi into murabaha notes.
“We only agreed to the conversion after Najib signed and approved it through the special rights redeemable preference shareholder resolution.
“In my opinion, the move to switch to murabaha notes was a good one as this may reduce our investment risk and to take care of the ‘sensitivity’ on Saudi Arabia and Malaysia’s diplomatic ties,” he said.
Najib is standing trial on 25 counts of money laundering and abuse of power over the alleged misuse of 1MDB funds amounting to RM2.28 billion deposited into his AmBank accounts between February 2011 and December 2014.
The hearing before High Court judge Collin Lawrence Sequerah continues tomorrow.