Ex-1MDB CFO says unaware that part of US$3 billion bonds was transferred to Tanore

The former chief financial officer of 1MDB told the High Court yesterday that he had no knowledge that part of the proceeds of the US$3 billion bond issuance had been transferred to three companies including Tanore Finance Corporation (Tanore).

Azmi Tahir, 48, said he only found out about the transfers through media reports.

In the opening statement of the 1MDB case, the prosecution claimed that Tanore had transferred a total of US$681 million into Najib Razak’s account between March 21, 2013 and April 10, 2013. This was the main point in the charges against the former prime minister.

The 12th prosecution witness said the bonds should have been invested in a 1MDB joint venture with Aabar Investment PJS, namely Abu Dhabi Malaysia Investment Company (Admic).

“Najib through his principal private secretary, the late Azlin Alias, had ordered the bonds to be channelled to three investment companies: Cistenique Investment Fund BV, Devonshire Capital Growth Fund and Enterprise Emerging Market Fund.

“However, I did not know that these three investment companies would transfer part of the US$3 billion bond funds to Tanore and two other companies, Granton Property Holding Limited and Midhurst Trading Limited.

“All these decisions and transfers were beyond my knowledge. I also asked Terence Geh (former deputy CFO of 1MDB) if we (1MDB) had any dealings with Tanore when the company’s name came out in the media and was linked to 1MDB. However, Geh at that time denied the matter,” he said.

He said this when reading out his 127-page witness statement at Najib’s corruption and money laundering trial involving RM2.3 billion in 1MDB funds.

Azmi said he and Mohd Hazem Abd Rahman, the former CEO of 1MDB, were only informed about investments in three companies, namely Cistenique, Devonshire and Enterprise Emerging.

“I confirm that I signed several documents confirming that 1MDB took note of the investments in these three investment companies.

“I had also never allowed any third party to make any investment with other parties, including Najib’s account,” he said.

Earlier, Azmi said the transfer of funds to the three companies was done on March 20, 2013, a day after the US$2.7 billion in bond issuance proceeds were deposited into the account of 1Malaysia Development Bhd Global Investments Limited (1MDB GIL).

“I confirm that after obtaining the board members’ approval and a letter of support from the finance ministry for bond fundraising, US$3 billion was disbursed into 1MDB GIL’s account, with a total of US$2.7 billion, which is the amount after deducting service charges imposed by the Goldman Sachs bank.

“As the CFO, the main purpose of raising funds of US$3 billion was for the Admic joint venture but since the funds were used for other purposes as early as 24 hours after the funds were received, I believe the Admic joint venture was deliberately designed to ensure the bonds could be issued legally,” Azmi said.

He added that the US$3 billion bond was not used at all for real estate and the development of Bandar Malaysia.

Najib, 68, is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The trial before judge Collin Lawrence Sequerah continues on Monday.