Govt must repay 1MDB’s $3bn loan debt, Najib lawsuit says

KUALA LUMPUR: A former Deputy Secretary General of the Ministry of Finance told the High Court today that the government was still repaying a $3 billion loan taken out by 1Malaysia Development Berhad (1MDB) nine years ago.

Datuk Siti Zauyah Mohd Desa, 63, who was then attached to the Loan Management, Financial Markets and Actuary (BPKA) division, said the $3 billion loan had been approved by the government via a letter of support signed by Datuk Seri Najib Tun Razak (image), who was finance minister in 2013.

Prosecution Witness 26 also confirmed that the division had not received any reports from 1MDB on how the money was spent or used.

“I confirm that 1MDB, as the party that took out a loan totaling US$3 billion, has not made the loan repayments in accordance with the stipulated terms. This has led the government to bear the debt of 1MDB today based on the letter of support issued by the government and signed by the Minister of Finance (Najib),” he said.

The US$3 billion was raised from bonds issued by 1MDB’s subsidiary, 1MDB Global Investment Ltd (1MDB GIL), for a 50/50 joint venture between 1MDB and Aabar Investments PJS.

Previously, the court was told that the debt should have been paid in full by 2023.

Reading his witness statement during the former Prime Minister’s trial over the embezzlement of RM2.3 billion of 1MDB funds, Siti Zauyah said that BPKA was then responsible for obtaining reports from 1MDB.

However, she added that during her tenure at the division, she did not receive any counter reports from 1MDB management regarding the use of the $3 billion in funds.

“1MDB is responsible for submitting the investment reports as stipulated in the request for letter of support to the Ministry of Finance.

“From our side, we had then contacted the representative of 1MDB, Zahid Taib, for them (1MDB) to provide comments, submit documents or reports to the Ministry of Finance, but they never did,” said she declared.

“I also confirm that I myself never saw the document of agreement between 1MDB and Aabar as stated in their application because 1MDB was not under my division at that time. Among the documents we regularly requested , there were 1MDB’s audited financial reports, a copy of which must be provided to the Ministry of Finance, but they did not,” she said.

Siti Zauyah said there are policies which state that Ministry of Finance Incorporated (MoF Inc) companies wishing to enter into joint venture or investment agreements with external parties must be presented to the division of MoF Inc, after whereupon the division will prepare documents for approval by the Ministry of Finance and then for approval by the cabinet.

“It’s the existing policy and process. In the case of 1MDB, I confirm that 1MDB did not submit a report allowing them to enter into a joint venture agreement with Aabar, as mentioned in my testimony today,” said Siti Zauyah, adding that she does not Wasn’t sure if 1MDB received any special grants. the approval of the Minister of Finance on the joint venture.

She said that after the letter of support was sent to 1MDB in 2013, the Ministry of Finance no longer issued guarantee documents to 1MDB.

Regarding the management of 1MDB, which had been placed under the control of MoF Inc, the witness confirmed that no official from the Ministry of Finance or the MoF Inc branch had been appointed as a member of the board of 1MDB.

She said it was because in other MoF Inc companies (other than 1MDB), the Minister of Finance was not directly involved, as to his role in 1MDB, in which the Minister of Finance (Najib) appointed himself chairman of the 1MDB advisory board.

“I confirm that in other companies of MoF Inc, these kinds of situations do not occur,” the witness said, while adding that 1MDB had been in regular contact with Najib if the BPKA division had any requests or opinions. regarding questions regarding the letter of support. for the $3 billion loan.

Najib, 68, faces four charges of using his position to obtain bribes totaling RM2.3 billion from 1MDB funds and 21 charges of money laundering in the same amount.

The trial before Judge Datuk Collin Lawrence Sequerah continues tomorrow. — Bernama

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