Jho Low made RM700mil by ‘flipping’ 1MDB bonds, court told

The High Court was told that two foreign companies linked to fugitive financier Jho Low bought up bonds issued by Terengganu Investment Authority, the predecessor of 1MDB. (Bloomberg pic)

KUALA LUMPUR:

A former 1MDB director told the High Court in Najib Razak’s trial that he was not aware that foreign companies linked to Low Taek Jho, or Jho Low, purchased the RM5 billion bonds issued by Terengganu Investment Authority (TIA) to secure loans for the sovereign fund.

Ismee Ismail said this while being cross-examined by lawyer Shafee Abdullah on whether he knew that Aktis Capital Singapore Pte Ltd and Country Group purchased the Islamic medium-term notes and made a profit by reselling them to local companies at face value.

Ismee said the management was not informed of the “flipping” of the bonds, after Shafee pointed out that the fugitive businessman made a profit of RM700 million from the purchase.

Shafee: Did the board know about the secondary subscription?

Ismee: I don’t recall the incident or whether it was discussed in our meeting.

The court previously heard testimony from former 1MDB CEO Shahrol Azral Ibrahim Halmi that two companies linked to Low purchased the RM5 billion bonds issued by TIA.

Shahrol said he was only informed of this by Bukit Aman’s commercial crime department investigating officer R Rajagopal when he had his statement recorded by police in 2018.

Rajagopal is scheduled to testify later.

The court heard that TIA received RM4.39 billion from the RM5 billion bonds sale as Ambank was paid “over a few hundred million” in fees as the facilitator of the bond issue.

When Shafee asked whether Shahrol “misled” the board of directors on the issuance of the RM5 billion bonds, Ismee did not give a reply.

Previously, Ismee told the court that Terengganu’s Sultan Mizan Zainal Abidin had ordered him to suspend the issuance of the Islamic medium-term notes. He said he and Shahrol signed the documents to suspend the issuance on Sultan Mizan’s orders.

However, Ismee said Shahrol told him later that 1MDB could not suspend the issuance as the company had already given instructions to Ambank.

The court heard how TIA initially wanted to develop Pulau Bidong in Terengganu as the state’s new tourism spot. The island used to be the home of Vietnamese refugees from the 1970s to 1990s.

TIA wanted to raise RM5 billion through the Islamic medium-term notes, and Ambank was selected, and the bonds would be guaranteed by the federal government.

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.

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Jho Low made RM700mil by ‘flipping’ 1MDB bonds, court told

A former 1MDB director says the management was not aware the fugitive financier subscribed to the RM5 billion bonds issued by Terengganu Investment Authority.