Ex-1MDB CEO claimed Najib refused revaluation of assets despite concerns

Ex-1MDB CEO claimed Najib refused revaluation of assets despite concerns

Former 1MDB chief executive officer Shahrol Azral Ibrahim Halmi claimed that Prime Minister Najib Abdul Razak had refused the revaluation of assets in 1MDB’s joint-venture with PetroSaudi International (PSI) despite concerns raised by the 1MDB board of directors.

This is according to the Public Accounts Committee (PAC) report tabled today which referred to Najib in his position as 1MDB board of advisers’ chairperson.

According to the report, the 1MDB board of directors had doubts about the joint-venture in which 1MDB was to commit US$1 billion in cash while PSI would only need to commit at least US$1.5 billion in energy assets to their joint-venture vehicle 1MDB PetroSaudi Ltd.

Edward L Morse, who was appointed by Shahrol Azral to conduct an independent valuation of PSI’s assets on behalf of 1MDB on Sept 29, 2009, was strangely able to produce the valuation report on the very same day.

The PAC report said Morse knew about his appointment as early as September 20, 2009, but noted that the valuation report was completed in eight days, despite the complexity of the assets and initial statements that it would take months.

Furthermore, the valuation of the assets was only completed a day after the joint-venture deal was signed on Sept 28, 2009, in defiance of the conditions set out by the 1MDB board of directors which required the independent valuation be completed beforehand.

The 1MDB board of directors in its meeting on Oct 3, 2009, made note of its unhappiness and also expressed puzzlement at the speed Morse was able to complete the valuation report.

Board wanted Najib to approve second valuer

At a subsequent meeting on Oct 10, 2009, the board of directors sought Najib’s intervention.

“During the meeting, the 1MDB board of directors raised about the need to shortlist 10 credible valuers for the approval of the board of advisers’ chairperson.

“The management can then discuss with PetroSaudi Holdings (Cayman) Ltd about the appointment of a second valuer.

“However, during the 1MDB board meeting on Nov 7, 2009, Shahrol Azral informed that a second valuation of the assets was not needed as the board of advisers’ chairperson (Najib) did not agree with the suggestion but ordered the 1MDB board of directors to appoint a consultancy company to evaluate the ownership of the joint-venture company.

“However, checks by the Auditor-General’s Department found no documentation to prove any appointment of a consultant was made,” said the PAC report.

Ultimately, 1MDB signed the joint-venture deal without knowing for sure if PSI was holding up its end of the bargain with the said assets.

As soon as 1MDB signed the deal on Sept 28, 2009, it was required to deposit its part of US$1 billion in cash within two days, into the joint-venture vehicle 1MDB PetroSaudi Ltd, which was promptly done.

However, the PAC report found that only US$300 million was deposited into the joint-venture account, which was approved by Bank Negara, while US$700 million was diverted without approval to Good Star Ltd.

Ex-1MDB CEO claimed Najib refused revaluation of assets despite concerns
7 Apr 2016 – malaysiakini


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