He said then 1MDB chairman Mohd Bakke Salleh received a call from Najib during a directors’ meeting on May 22, 2009.
Bakke stepped out of the meeting room to answer the call.
“After two minutes, Tan Sri (Bakke) came back and told us the prime minister wanted to approve the PetroSaudi joint venture quickly.
“I believed that it was a government-to-government deal, although I had some reservations about it,” he said.
Ismee said US$1 billion was pumped into the joint venture company. The money was 1MDB’s contribution for its 40% shareholding while PSI held 60% of the equity.
The US$1 billion was part of the RM5 billion raised through Islamic medium-term notes for the development in Pulau Bidong, Terengganu. The plan, however, did not materialise.
Ismee also said that during an earlier briefing by the 1MDB management team, he was told that the joint venture was a diplomatic initiative between Malaysia and Saudi Arabia.
He said then company executive Casey Tang told the directors that PetroSaudi was the late King Abdullah’s company.
“At the briefing, Tan Sri Azlan (Mohd Zainol) asked Tang why 1MDB had to speed up the PSI joint venture, to which he replied that a signing ceremony had been scheduled to be held on Sept 28, 2009 between Malaysia and Saudi Arabia.
“Tang also told us that King Abdullah would attend the signing ceremony,” he said.
He said the 1MDB directors had doubts on the joint venture as they felt that inadequate due diligence had been conducted.
“We didn’t want to rush this joint venture because we needed to see more facts and figures,” he said.
He also said that if it had not been for Najib’s instructions, 1MDB would have done more research into the joint venture proposal.
“The directors could have called off this joint venture but our decision could have been overridden by the shareholder and finance minister (Najib).
“The company’s constitution gave powers to the finance minister to appoint new directors if he was unhappy with the existing members,” he said.
Najib is standing trial for 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.